Prelude to the Controversy
Since its launch on March 28, 2020, the Prime Minister's Citizen Assistance and Relief in Emergency Situations Fund "PM CARES" has courted as much controversy as it has funds. Having reportedly collected over INR 6500 crores within a week of its launch, the fund has incurred the wrath of the opposition (for the political-signalling acronym and for ignoring the existing PMNRF) and has also been the subject of at least two Public Interest Litigations "PILs", neither of which got a warm reception at the Apex Court. While the first was dismissed summarily as being misconceived, the petitioners of the second were threatened with a fine and asked to withdraw the PIL owing to its "political colour". Nonetheless, a dismissal of political objections still leaves pressing concerns of transparency and accountability as troubling residue. While the Apex Court's order itself may be justified in view of the sound principle of 'judicial deference to executive', the swift and intolerant manner of its dismissal births a judicial chilling effect.
Adding fuel to the fire, was the denial by the Prime Minister's Office "PMO" to disclose information and documents pertaining to PM CARES against a Right to Information "RTI" application filed on April 21, 2020. This refusal has been condemned as being in sheer violation of the RTI Act as not only was it rooted in mere technicalities, but it also misinterpreted a SC decision in its reasoning. Further, in the first week of May, the Central Information Commission sent a letter to the Union Government directing them to maintain meticulous records of the public expenditure and welfare measures undertaken to combat the COVID-19 pandemic. However, there was no specific reference to PM CARES.
Latest in the slew of controversies is the PMO's refusal on May 29, 2020, to furnish information sought by yet another RTI applicant regarding the constitution of PM CARES on the grounds that it is not a 'public authority' within the meaning of Section 2(h) of the RTI Act. This refusal coupled with factors such as its insistence on amassing staggering amounts of funds through non-budgetary heads of PSUs fortifies our concerns: PM CARES too, is attempting to shield itself from the sabre of the RTI Act, aping the stand taken by its so-called Siamese twin, PMNRF in the 2018 Delhi High Court case of PMNRF v. Aseem Takyar.
Thus, here the authors argue in favour of the applicability of the RTI Act on PM CARES while also highlighting how a clear-cut accountability mechanism aligns with the guidelines of several international organizations and the approach adopted by other countries.
PM CARES is "Public Authority" under RTI Act
The primary question is whether PM CARES falls within the meaning of the term "public authority" defined in Section 2(h) of the RTI Act. The Division Bench in Aseem Takyar gave a split verdict on the quintessential question of whether or not PMNRF is a "public authority" within the meaning of Section 2(h). Section 2(h) is reproduced below:
"(h) "public authority" means any authority or body or institution of self-government established or constituted- (d) by notification issued or order made by the appropriate Government, and includes any-- (i) body owned, controlled or substantially financed; (ii) non-Government Organisation substantially financed, directly or indirectly by funds provided by the appropriate Government"
Justice Sunil Gaur, holding the view that PMNRF is not a "public authority", observed that it does not owe its genesis to the government, but to a Press Note issued by the then PM, Pandit Nehru, in his ex-officio capacity. Secondly, he relied on the SC decision in Thalappalam to establish the requirement of 'substantial control' as opposed to mere 'supervisory control' and on the Delhi HC decision in Army Welfare Housing Organization to demonstrate that the mere presence of government functionaries in an ex-officio capacity does not imply that the government is exercising control through said functionaries. Applying these, he opined that the fact that the fund is housed in the office of the PM, does not by itself support an inference that it is wholly owned by the government. Further, the fund is not constituted by the Parliament nor by the Government and it is managed by multiple delegates and not just government functionaries in their official capacity. In fact he goes on to say "If PMNRF is not non-governmental organization, then what is it?" Thirdly, on the aspect of funding, he emphasized on the voluntary nature of donations and the non-acceptance of contributions from budgetary sources of government or from the balance-sheets of PSUs.
Lastly, he briefly sketched an in arguendo stating that the traditional custom of 'Gupt Daan' needs to be appreciated in light of the Puttaswamy judgment and the privacy of donors ought to be protected.
PM CARES also owes its genesis to an appeal by the PM, Mr. Narendra Modi. Further, the power of the Chairperson to appoint three trustees may bolster the contention that management of the fund is the prerogative of a variety of delegates and not just government functionaries. Furthermore, the funds amassed from PSUs have been cornered carefully to superficially continue as a fund which accepts only 'voluntary donations'.
Despite these similarities, the authors respectfully disagree with Justice Gaur's opinion and its applicability to PM CARES. To say the least, Justice Gaur's analysis is superficial and goes against the object of the RTI Act. The enactment is a bastion of democracy and checks corruption by enhancing transparency and accountability. The preamble accentuates the need to harmonise the right to information with other pressing interests such as confidentiality and privacy in the broader context of "preserving the paramountcy of the democratic ideal."
Thus, we expatiate on how PM CARES constitutes a "public authority" by applying Justice Ravindra Bhat's reasoning for PMNRF mutatis mutandis to PM CARES in addition to existing judicial precedents on RTI.
The first question is whether PM CARES was constituted by a notification or order made by the appropriate Government. The fact that the fund was constituted on an appeal from the PM's office via the Press Information Bureau supports the view of PM CARES as an authority or body established by 'notification issued' by the Government. If not, the Trust Deed by way of which PM CARES was birthed ought to suffice. If not, the instruments through which the decision to settle the trust was made and communicated to the Union Cabinet and the ordinance extending tax benefits or notifications granting exemption under FCRA or CSR incentives, ought to suffice as 'notification issued or order made' by the government.
In any case, as per Justice Bhat's interpretation, one must bear in mind the need to construe the provisions liberally and in light of the object of the RTI Act. The intention of the legislature to provide for an inclusive definition of "public authority" is indicated by the use of the words "and includes". Thus, even if one were to assume that PM CARES was not established "by notification issued or order made by the appropriate Government", subclauses (i) and (ii) of Section 2(h)(d) may be applied.
Section 2(h)(d), unequivocally states that "public authority" "includes any body owned, controlled or (emphasis supplied) substantially financed directly or indirectly by the appropriate Government." The PM is the Chairperson of the Board of Trustees and the Ministers of Defence, Home Affairs, and Finance are Trustees. All the aforesaid functionaries serve in their ex-officio capacity. Further, the PM, as the Chairperson, has the power to appoint three more Trustees (not yet appointed). The Trustees have the power to formulate the criteria for the disbursement of funds as well as appoint one or more independent auditor(s). The Trust Deed not being public as yet, there exists no clarification as to the decision-making process among Trustees inter-se. It is evident from the nature and extent of powers at the disposal of the PM and other cabinet ministers that it is indeed the Union Executive that exercises substantial control over the management and affairs of the Fund. Such a degree of control can by no stretch of imagination be termed as merely supervisory or regulatory.
Arguing in the alternative, the authors proffer the tentative applicability of 2(h)(d)(ii) to PM CARES. The authors argue that if it isn't imbued with governmental character and is indeed substantially private, it ought to be seen as a 'non-government organization' substantially financed by the government. It is pertinent to highlight the clear legislative intent in using the phrase 'directly or indirectly' which should help pierce through colourable attempts at circumvention. PM CARES, particularly, has amassed copious amounts from PSUs, MPLAD funds among others. The pressure to donate by accepting salary cuts (or other modes) is palpable. Caution has been exercised in not accepting funds from budgetary heads. For instance, Indian Railways, even with its fiscal struggles, has donated a whopping 151 crores-an amount generated through salary cuts. The argument is that the PM CARES Fund cannot be said to exist in the narrowest strip of executive convenience where they enjoy all benefits that accrue due to the governmental character without accepting any of the burdens and checks that the government is subject to. Simply put, the government cannot have its cake and eat it too.
Non-applicability of Exemptions under Section 8 of RTI Act
Further, the exemptions claimed by PMNRF in Aseem Takyar will not apply to PM CARES. The exemptions under Sections 8(1)(e) and 8(1)(j) of the RTI Act relate to protected interests of fiduciary relationship and privacy respectively, and are not absolute, but qualified by the goal of larger public interest being served by the disclosure of such information.
The CBSE case, while examining Section 8(1)(e), elucidates fiduciary relationship as characterized by a person reposing complete confidence in another to act on his/her behalf- either in general or specific to a transaction. This is not the case with PM CARES as neither donors nor beneficiaries repose trust in PM CARES to conduct their affairs or to act on their behalf. The act of charity is insufficient for establishing a fiduciary relationship.
Further 8(1)(j) carves an exemption for personal information, the disclosure of which bears no significance to any public activity or interest. The disclosure of information on how the PM CARES funds are being spent lies squarely in the "public interest" qualification. In Bihar Public Service Commission v. Saiyed Hussain Abbas Rizvi, the Supreme Court characterised "public interest" as incapable of a precise definition and flexible enough to "take colour from the statute in which it occurs." In the present context, "public interest" draws its meaning from the democratic ideals of an informed citizenry and transparency of information for curbing corruption as enshrined in the preamble of the RTI Act. Furthermore, Justice KM Joseph's verdict in the Rafale Review Case is apposite to further buttress the contention that the exemptions in Section 8(1) do not suffice as a justification to escape the duty to disclose information in the present case. He draws our attention towards Section 8(2) of the Act which overrides the Official Secrets Act and Section 8(1). It makes explicit the legislative intent in prescribing a harm versus benefit calculus. The harm to protected interests may be tolerated if public interest in disclosure outweighs said harm. In any case, Section 11 of the RTI Act allows third-parties apprehending an unwarranted breach of their privacy to make a representation to the concerned Public Information Officer "PIO". Thus, the Act itself provides a recourse to aggrieved third-parties. Nevertheless, it preserves the democratic ideals of transparency and accountability, leaving the ultimate decision on disclosure to the PIO. This decision, once again, is guided by satisfaction of the aforementioned calculus of 'public interest'.
It is the authors' vehement view that this harm versus benefit calculus tilts in favour of disclosure in this case. Donning the cynical lens for viewing government action is informed by antecedents of corruption and impropriety. While Senior Advocate Sanjay Hegde has pointed to the infamous cement scam, Yashwant Sinha has invoked a parallel with Electoral Bonds. The improprieties therein have stained the antecedents of the present government as well.
Accountability and Expediency during Crises: International Theory and Practice
The approach of bringing the PM CARES fund within the ambit of RTI is in harmony with the guidelines prescribed by the IMF, World Bank, and Transparency International for maintaining accountability standards during COVID-19 spending.
These guidelines are unequivocal in their position: expediency is crucial, no doubt. Accountability, however, remains a sine qua non, rather, more so amidst crisis. The aphorism, "chaos is a ladder" is manifested in the corruption unearthed post the Hurricanes Katrina and Maria in the USA and the Ebola epidemic in Sierra Leone. Senior officials from the World Bank have stressed on the reorientation of accountability mechanisms instead of their dilution. For instance, ex-ante controls may be replaced with "clear, explicit and credible" ex-post controls. Swift and succinct suo moto dissemination of information and ex-post check by the supreme audit institution (Comptroller and Auditor General "CAG" in India's case) are other measures that further this view.
The USA is looking to explore use of the Digital Accountability and Transparency "DATA" Act of 2014 - an Obama legacy - to make COVID-19 spending transparent by uploading details on USAspending.gov. Canada's situation can be likened to India's. While the Federal Information Commissioner has emphasized the need to document all COVID-19 decision-making, without a clear "duty to document", the Access to Information regime is characterised by inertia. In the EU, the pandemic has dampened the Access to Information regime. Even so, the emphasis on whistle-blower protection in EU law disincentivizes misappropriation. Closer to home, even the Pakistan Supreme Court chided the government, directing it to put adequate transparency and accountability mechanisms in place for all COVID-19 funds.
At home, the National Disaster Management Act, 2005 "NDMA", which prescribes a CAG audit and penal measures for misappropriation of funds [Sections 53, 55, and 56], is a useful benchmark for accountability. The demand for a CAG audit, bolstered by a combined reading of Article 266(2) and Article 149 of the Constitution, is emboldened in light of the Government's announcement to subject PM CARES to independent auditors. An independent auditor or even several auditors cannot be expected to "stand up to the might" of the Government. The model proposed by leading watchdogs in this respect is a dual audit including the CAG and an independent auditor. The hope is that both would act as a check on the other and minimize scope of abuse.
Transparency and Trust - A classic give-to-get?
In his speech on May 12, 2020, the PM made a poetic reference to the 2001 Gujarat earthquake. The striking fact is that, in 2002, the Gujarat High Court dealt with a PIL filed by several prominent public figures that demanded a proper mechanism for curbing misappropriation of the funds collected to provide effective relief to earthquake victims. It was made abundantly clear in the judgment that donations (whether in cash or kind) made to the Government, an NGO, or any other individual for the purpose of providing relief to the victims of a calamity are always in the nature of a trust. Since the donors have donated the funds for the specific purpose of relief, rehabilitation, and aiding the victims of such disasters, they have an enforceable right to demand accounts detailing the receipts and expenditures.
Unfortunately, a CAG audit and emulation of accountability under the NDMA seem bleak possibilities now. However, assuming that the government is working with the best interests of the people in mind, it must acknowledge that its actions pose the threat of limiting the potential of PM CARES itself. The fund was set up not just to receive donations in tens of crores but to enable micro-donations as low as INR 10 itself. On May 13, 2020, the PMO announced allocations to the tune of INR 3100 crores for ventilators, migrant workers and vaccine development. This may be viewed as baby-steps in transparency. However, the authors vehemently insist that the dictate of transparency cannot hinge on whimsical benevolence of the Executive and must exist as a right. It has been nearly two months and the government's glacial pace at making the fund transparent and accountable has all of us worried. With every day of silence on the issue, doubt festers causing a trust deficit. This trust deficit is counterproductive to realizing the full potential of the fund itself and thereby, to battling the pandemic. As such, the case for disclosure under RTI is already made. It would be best if the PM were to allay all such concerns by expressly declaring the fund to be subject to the RTI Act.
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