I. Introduction

The Indian government has been applauded for managing to restrict the outbreak of COVID-19 by imposing strict lockdown regulations. However, there are certain actions which have been rightly questioned for lacking basis and concrete reasoning one of which certainly happens to be the establishment of the Prime Minister’s Citizen Assistance and Relief in Emergency Situations (PM-CARES) Fund. This article seeks to delve deep into the legal framework surrounding the PM-CARES fund and the reasons for which it has come under the scanner.

Recently, an RTI application looking out for the details of the fund was rejected by the Prime Minister’s Office stating that it does not come under the ambit of “public authority”[1]. Section 2(h) of the Right to Information Act[2] defines “public authority” as an authority or body which is constituted under an act of Parliament[3], or under the Constitution[4], or by a law made by the State Legislature[5]. Although the fund was created as a public charitable trust[6], there is no law in place which protects a charitable trust from disclosing information[7]. In determining whether an account is a “public authority” or not, it needs to be ascertained in the context of the Right to Information Act.

II. “Public Authority” or Not?

The PM-CARES Fund was not established through legislation by the Parliament or State Legislature or a Constitutional Amendment, rather it was formed in a hasty manner through a press note via a press conference on 28^th March 2020[8]. Thus, it manages to avoid the “public authority” tag under Sections 2(h)(a), 2(h)(b) and 2(h)(c). However, when the fund’s stature is examined through the lens of Section 2(h)(d), it cannot be overlooked as something which is beyond the scope of the RTI Act. It is also imperative to understand that the three conditions mentioned in Section 2(h)(d)(i) – owned, controlled and substantially financed[9] – are not cumulative, but distinct in alternative[10]. Thus, if a body satisfies the requirement of clause (i) or (ii), conditions (a) to (c) need not be satisfied.

If the charitable fund is weighed against the three parameters of ownership, control and significant financial backing, all three parameters are satisfied.

Ownership

In this case, the objectives state that the fund can be spent for any reason as long as it is not inconsistent with the objectives. Arguendo, if the government says that the legal title is absent for it is established as a charitable trust, the thing which needs considerable attention is the fact that it is headed by the Prime Minister. Any trust with the democratic head of the country at its helm cannot be said to be beyond the purview of the people’s right to know. The trust gains its strength from the prestige lent by the Prime Minister’s name on it and disbursements in any form should be considered to be a matter of public record[11]. Terming it as a ‘trust’ is an attempt to hide the government ownership behind the veil of such a trust. Control, administration, management and finance become evaluating factors in determining the owner of the PM-CARES Fund[12] and as far as these are concerned, there is nothing to contradict the ownership of the government. The next factor which needs to be addressed is the aspect of control.

Control

The term ‘control’ has an incredibly wide connotation[13] but in cases of determining the scope of the RTI Act, the term has to be read in context with the words precedent and subsequent to it. Thus, control does not merely imply supervisory action but rather indicates significant control over the fund[14]. The control of the fund lying exclusively with the government is evident from the following aspects:

1. Board of trustees: The board of ex-officio trustees comprise of the Union Home Minister, Defence Minister and the Finance Minister of the Government of India[15]. The Prime Minister National Relief Fund (PMNRF), which was the only existing national relief fund before the PM-CARES fund came into being, is managed by the Prime Minister, his deputy, the Finance Minister, the Congress President, a representative of the Tata trustees and an independent industry representative[16]. The new fund has conveniently left out anybody who is not a part of the government in power, thus making it adequately clear that the control lies at the undisputed discretion of the Union government.
2. Appointment of Auditors: Since the rejection of the RTI application, the Prime Minister’s Office has also stated that the fund will not be audited by the Comptroller and Auditor General but by an independent auditor[17]. The independent auditing group, SARC & Associates headed by Sunil Kumar Gupta, was also selected at the discretion of the fund’s ex-officio chairman and trustees. However, his affiliation with the ruling government makes it a debatable appointment[18].
3. Status of the Fund: Although the Prime Minister’s Office portrays it as a charitable trust, it has not been registered under the Indian Trusts Act, 1882. The PMNRF was formed in 1948 by Pandit Jawahar Lal Nehru[19] and it was later given the form of trust through an application under Section 12A of the Income Tax Act[20] to extend tax benefits to its donors. The PM-CARES fund has not been registered under the same provision however, leaving the status of the fund uncertain. The government’s incalculable controlling scope gives them the power to also disburse funds at their pleasure and the donors are not given the opportunity to have a say.

Thus, the above-mentioned points act as conspicuous suggestions to prove that the control lies at the hands of the Central Government solely. This also implies that the second requisite of Section 2(h)(d)(i) is also satisfied.

Finance

The fund’s objectives explain that it shall not receive any financial aid from the budgets allotted to the Union government[21]. The PM-CARES fund does not bear any lineage to the Consolidated Fund of India[22] or the Contingency Fund of India[23]. Further, it provides Corporate Social Responsibility (CSR) benefits to the organizations donating to the fund under Section 135 of the Companies Act, 2013[24]. It also provides tax benefits to the donors under Section 80G of the Income Tax Act[25]. Due to these exemptions and benefits, it is imperative for the fund to go through a transparent auditing process. With so much fiddling of taxpayers’ money in the recent past[26], the citizens of the country deserve to know about the corporate contributions and the exemptions that the corporate powerhouses are receiving as a result of the same.

There is a prominent distinction between PMNRF and PM-CARES fund in terms of accepting monetary contributions from government entities such as PSUs. PMNRF did not accept charity from the balance sheets of PSUs[27] and this was a major contention which attributed to Justice Sunil Gaur’s dissenting opinion in the case of PMNRF v. Aseem Takyar[28]. However, the PM-CARES fund has received massive contributions in the range of Rs. 500 crores from PSUs. Even salaries of PSU employees have been handed out to the fund, without their consent. The Railways have contributed Rs. 151 crores to the fund[29] but have surprisingly failed to provide free transport for migrant workers. These instances substantiate the claim that the fund is extensively financed by the government through their undertakings. Thus, the third condition of “substantial financing” by the government is also satisfied.

III. Conclusion

As several uncertainties loom large over the PM-CARES fund, the responsibility of the Prime Minister and his fellow office-bearers in establishing clarity assumes supreme significance. The fund has raised confidence due to its relationship with the Prime Minister’s Office and the details of the fund ought to be disclosed in the public interest. PM-CARES is owned, controlled and substantially financed by the government which is sufficient to give it the status of a “public authority”, thus bringing it under the scope of the RTI Act.

There are numerous differences between the PMNRF and PM-CARES and their legal characters are similarly opaque. Demands to transfer the contributions to the PMNRF should not be prioritized as it would only further complicate the issue by resulting in political conflicts. Although PMNRF lays out its income and expenditure details on its website, it does not reveal any information about the donors. Thus, the charter of PM-CARES fund should be carefully amended for it to retain the confidence of the citizens of the country otherwise it would only become another instance of exploiting trust by the government.

[1] LIVELAW NEWS NETWORK, ‘PM CARES Fund Not A “Public Authority” Under RTI Act, Says Prime Minister’s Office’ (30 May 2020) <https://www.livelaw.in/top-stories/pm-cares-fund-not-a-public-authority-under-rti-act-says-prime-ministers-office-157573&gt; accessed 21 June 2020.

[2] Section 2(h), Right to Information Act 2005.

[3] Section 2(h)(b), Right to Information Act 2005.

[4] Section 2(h)(a), Right to Information Act 2005.

[5] Section 2(h)(c), Right to Information Act 2005.

[6] ‘About PM CARES Fund | Prime Minister of India’ <https://www.pmindia.gov.in/en/about-pm-cares-fund/&gt; accessed 21 June 2020.

[7] ‘WHETHER PUBLIC CHARITABLE TRUSTS ARE COVERED UNDER THE RTI ACT 2005? | Abhay Nevagi & Associates’ <http://www.anevagi.com/whether-public-charitable-trusts-are-covered-under-the-rti-act-2005/&gt; accessed 21 June 2020.

[8] ‘Plea Claiming PM-CARES Fund as Public Authority Non Maintainable: PMO to HC’ (https://www.outlookindia.com/) <https://www.outlookindia.com/newsscroll/plea-claiming-pmcares-fund-as-public-authority-non-maintainable-pmo-to-hc/1861929&gt; accessed 21 June 2020.

[9] Section 2(h)(d)(i), Right to Information Act 2005.

[10] National Stock Exchange of India Ltd. v. Central Information Commission, W.P. (C) No. 4748/2007 (2010), ¶17.

[11] 2018 SCC OnLine Del 9191, ¶36.

[12] Thalappalam Service Coop. Bank Ltd. v. State of Kerala, (2013) 16 SCC 82, ¶45.

[13] Corporation of the City of Nagpur v. Ramchandra, (1981) 2 SCC 714, ¶4.

[14] supra note 12, ¶44.

[15] ‘About PM CARES Fund | Prime Minister of India’ <https://www.pmindia.gov.in/en/about-pm-cares-fund/&gt; accessed 21 June 2020.

[16] ‘PMNRF vs PM CARES: PMNRF Always Had Congress President on Its Managing Committee While PM CARES Is Far More Democratic’ <https://www.opindia.com/2020/04/pmnrf-managing-committee-congress-president-all-you-need-to-know/&gt; accessed 21 June 2020.

[17] ‘Coronavirus – PM CARES Fund Won’t Be Checked By CAG, Say Sources’ <https://www.ndtv.com/india-news/coronavirus-pm-cares-fund-wont-be-checked-by-cag-say-sources-2217714&gt; accessed 21 June 2020.

[18] ‘PM CARES Fund Now Has “Independent Auditor” But Remains Beset by Lack of Transparency’ (The Wire) <https://thewire.in/government/pm-cares-fund-now-has-independent-auditor-but-remains-beset-by-lack-of-transparency&gt; accessed 20 June 2020.

[19] ‘Prime Minister’s National Relief Fund’ <https://pmnrf.gov.in/en/about&gt; accessed 21 June 2020.

[20] Section 12A, Income Tax Act 1961.

[21] ‘About PM CARES Fund | Prime Minister of India’ (n 15).

[22] Art. 266(1), The Constitution of India 1950

[23] Art. 267(1), The Constitution of India 1950.

[24] Schedule VII (viii) r/w Section 135, The Companies Act 2013.

[25] Section 80G, The Income Tax Act 1961.

[26] Shekhar Gupta, ‘Change That Headline: How Nirav Modi Had to Make Way for Narendra Modi’ (ThePrint, 3 March 2018) <https://theprint.in/national-interest/how-nirav-modi-had-to-make-way-for-narendra-modi/38965/&gt; accessed 23 June 2020.

[27] ‘Prime Minister’s National Relief Fund’ (n 19).

[28] 2018 SCC OnLine Del 9191, ¶40.

[29] Priscilla Jebaraj, ‘How Different Is the PM CARES Fund from the PM’s National Relief Fund?’ The Hindu (10 May 2020) <https://www.thehindu.com/news/national/coronavirus-how-different-is-the-pm-cares-fund-from-the-pms-national-relief-fund/article31546287.ece&gt; accessed 21 June 2020.

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ABOUT THE AUTHOR

Arnab Chakraborty

Arnab Chakraborty is a second-year BBA. LLB student at National Law University Odisha. He has a keen interest in the areas of Constitutional Law and Technology Law.