The recent Supreme Court's judgment in Centre for PIL (CPIL) vs Union of India on the legality of the PM Cares fund is legally flawed and disheartening. It epitomizes the hands-off approach of the Court in recent years in public interest cases, where it trusts the executive more and questions it less.
The current decade of 2011-2020 has clearly been the most turbulent period in the history of the Supreme Court. This decade can be neatly divided into two starkly different 5-year periods. The country witnessed a powerful, assertive and highly respected Supreme Court from 2011 to 2015. However, the next 5 years from 2016 to 2020 witnessed the Court cede its authority to a dominant executive, while it itself became mired in serious controversies.
In the initial part of the decade, the Court cracked the whip against arbitrary allocations of natural resources like spectrum and coal. It came down hard on illegal mining in several states. The Court struck down statutory appointment of the CVC because the appointee was facing a vigilance case. By the end of 2015, the judiciary's respect in public eyes was so high that people cheered the Court for quashing Constitutional amendment creating the NJAC which had been passed almost unanimously by the Parliament and had been approved by legislative assemblies of over 20 States.
From 2016 onwards, there was a noticeable shift in Court's approach and it virtually stopped holding the executive to account on all important issues, be it false encounters, lynchings, citizenship amendment, NRC, electoral bonds, demonetization, Kashmir, arrests of activists in fabricated cases, draconian lockdown and the migrant crisis. This period also damaged Court's reputation, since it brought huge controversies ranging from impeachment motion, judges' press conference, medical college bribery case, sexual harassment case, Kalikho Pul suicide note, controversial collegium decisions and the Rajya Sabha appointment.
The judgment of the Court in CPIL case is part of the above trend of the last 5 years where the executive has had its way on an important public issue. The petitioner CPIL had pointed out that while the Government notified Covid-19 to be a disaster under the Disaster Management Act, 2005 (DMA) and exercised huge powers under that law, but it failed to discharge its statutory duties of formulating a National Plan to contain Covid-19 (Section 11) or prescribing minimum standards of relief (Section 12). Most importantly, the petition asked for proper effectuation and utilization of the National Disaster Response Fund / NDRF (Section 46). CPIL argued that Government could not legally create a separate PM Cares Fund for Covid-19 disaster relief in derogation of the NDRF, and therefore, its receipts must be transferred to the NDRF.
The Court however on 20th August dismissed the petition. The Court held that there is no need for National Plan specifically for Covid-19 since the general Plan formulated in 2019 (before the virus outbreak) and the multiple guidelines being issued by various ministries, are adequate compliance with the DMA. The Court also held that there is no need to lay down enforceable minimum standards of relief for Covid-19.
Most disappointingly, the Court held that there is no illegality in constitution of PM Cares fund, and the receipts of it need not be transferred to the NDRF. As per Court, the money collected under the fund is not Government money, but funds belonging to a trust. Since the PM Cares trust was not funded through budgetary allocations but voluntary contributions, it could function like any other trust in the country.
The Court's judgment essentially equates the PM Cares Trust with other charitable trusts like Tata Trust, Reliance Foundation or Azim Premji Foundation, which are run by private entities and do not need a CAG audit or RTI Act compliance.
The writ petition had pointed out that although the coronavirus has affected the entire world, India is the only country which witnessed a humanitarian disaster and a severe economic and employment crisis. This occurred because a draconian nation-wide shutdown was imposed without any expert advice, consultation or due notice. Moreover, the country has also failed to contain Covid-19 and the cases have surged exponentially. It was submitted that these multiple crises occurred due to government's arbitrary and ad hoc decision making, by issuing over 800 guidelines/notifications within 3 months, and by not consulting experts or following their advice. Therefore, the petitioner had asked for a National Plan to be formulated specifically for Covid-19 by the National Disaster Management Authority (NDMA) which would act as blueprint for all authorities and lay down a strategy to contain the virus and its multiple fallouts. The Court however felt otherwise.
The petitioner had also argued that Section 46 of the DMA obliges the government to channel all donations and grants to the NDRF, which has to be used for disaster relief. NDRF is audited by the CAG, comes under the RTI regime and can be scrutinized by the Parliament. PM Cares could not be equated with any ordinary charitable trust since the Prime Minister was the ex-officio Chairman of this Trust. Further, Ministers of Defence, Home and Finance were all ex-officio trustees of the fund. Donations to the fund were sought by the Government itself, though various advertisements and through its official website.
No Occasion For CAG Audit Of PM CARES Fund As It Is A Public Charitable Trust: SC [Read Judgment]
PM Cares fund uses the name and picture of the Prime Minister himself. Clearly a message was given to the public and corporates that this is the government fund for Covid-19 disaster relief in case they wanted to donate towards disaster management, frontline workers, medical supplies, or relief for migrants etc. In fact, it was only on 19th June, two days after notice was issued in the CPIL's petition, that the Government formulated a procedure for the public to donate to the NDRF and uploaded the bank account details for making the payment. Clearly the aim of the government was to divert all funds to the PM Cares Trust rather than the NDRF.
Therefore, it was no surprise that in just 5 days, from 27th to 31st March, Rs. 3076 crores had already been collected as per the Government website. However, Government has till date not disclosed the amount collected from 1st April onwards or its utilization, which is believed to run into tens of thousands of crores.
Under the Companies Act, corporates are obligated to spend two percent of their net profit on CSR activity, which goes into funding many educational, health, environmental and social initiatives. When the Government included donation to the PM Cares fund as a CSR activity, it was obvious that thousands of crores of money would be diverted by corporates, who are only too willing to please the Government, to the PM Cares Fund. In fact, donations over Rs. 2000 crores have been made by public sector companies under various union ministries themselves to this Trust, which is patently public money.
If the Government had been transparent about the money collected and its utilization, and had not rejected independent audit and Parliamentary scrutiny, there would have perhaps been no occasion for any misgiving, even if the DMA mandated otherwise. However, the government completely blocked out all information concerning the fund, rejected RTI requests for even basic documents like copy of Trust Deed, appointed an auditor who was reportedly close to the ruling party, and the MPs of the ruling party reportedly did not allow the Public Accounts Committee (PAC) to scrutinize the fund. Mala fides were writ large on the government's attitude which wanted to use the huge sums collected as its private money.
The Government's counter-affidavit was noticeably silent on facts concerning the Trust. The Court therefore, in the first instance, ought to have asked the Government to place all information concerning the fund, the trust deed, the receipts, and the utilization before it. The Court ought to have questioned the Government why it created a parallel fund bypassing the statutory regime. The Government should have been taken to task for resisting a CAG audit or transparency since the Trust was undertaking state functions. A Trust headed by PM, with senior cabinet ministers as trustees, all in their ex-officio capacity, could not have been equated with an ordinary charitable trust. The money in the fund is clearly public money collected for a public purpose and Government could not have been allowed to pretend otherwise. However, the Court did not ask these pertinent questions and rejected the petition.
The CPIL judgment, therefore, failed to hold the Government to account on an issue of significant public importance. As the decade draws to a close, one hopes for a return of a time when the Supreme Court was less trustful of the executive and interrogated it more, while guarding the rights of the citizens more vigorously.
(The Author is an Advocate-on-Record, Supreme Court)
(This is an opinion piece and the views are of the author's, not necessarily reflecting the views of LiveLaw)