Being a public authority, PMO cannot deny the information about PMCARES Fund, which is created and controlled by it. Like PMO, PMCARES fund is also public authority under RTI Act.
Copies of the trust deed of PM CARES Fund, related Orders, notifications and circulars related to creation and operation of PM CARES Fund Trust were sought by Kandukuri Surya Harsha Teja, a law student. PMO rejected.
The PM CARES Fund is an abbreviation of 'Prime Minister's Citizen Assistance and Relief in Emergency Situations Fund'. The PM's official web page says: Keeping in mind the need for having a dedicated national fund with the primary objective of dealing with any kind of emergency or distress situation, like posed by the COVID-19 pandemic, and to provide relief to the affected, A Public Charitable Trust under the name of 'Prime Minister's Citizen Assistance and Relief in Emergency Situations Fund' (PM CARES Fund)' has been set up.
Authority is derived from official webpage
Web page pointed two main objectives as: (1) To undertake and support relief or assistance of any kind relating to a public health emergency or any other kind of emergency, calamity or distress, either man-made or natural, including the creation or upgradation of healthcare or pharmaceutical facilities, other necessary infrastructure, funding relevant research or any other type of support, and (2) To render financial assistance, provide grants of payments of money or take such other steps as may be deemed necessary by the Board of Trustees to the affected population.
Explaining the constitution of the Trust, the PM's webpage says that the Prime Minister is the ex-officio Chairman of the PM CARES Fund and Minister of Defence, Minister of Home Affairs and Minister of Finance, Government of India are ex-officio Trustees of the Fund.
Control of the PMO
The Chairperson of the Board of Trustees (Prime Minister) shall have the power to nominate three trustees to the Board of Trustees who shall be eminent persons in the field of research, health, science, social work, law, public administration and philanthropy. It also says that any person appointed as a Trustee shall act in a pro bono capacity.
Availing statutory exemptions
Interestingly, the PM's page announces exemptions from taxes, without disclosing under what authority or provision of law they are declared. Is it a statutory notification? Government order or any Rules declared under any law? A web announcement says: "Donations to PM CARES Fund would qualify for 80G benefits for 100% exemption under the Income Tax Act, 1961. Donations to PM CARES Fund will also qualify to be counted as Corporate Social Responsibility (CSR) expenditure under the Companies Act, 2013".
It also says: "PM CARES Fund has also got exemption under the FCRA and a separate account for receiving foreign donations has been opened. This enables PM CARES Fund to accept donations and contributions from individuals and organizations based in foreign countries". This should have been formalized and properly documented. There is no statutory or official communication other than this web publication.
The PM's page officially states that "this is consistent with respect to Prime Minister's National Relief Fund (PMNRF). PMNRF has also received foreign contributions as a public trust since 2011". The centre did not explain why this additional Fund is created when it was so similar or consistent to PMNRF?
Let us see the how the donations are being collected. Under the heading of 'other details' the PM's official page says: The fund consists entirely of voluntary contributions from individuals/organizations and does not get any budgetary support.
Now see how the Finance Ministry makes request. The Finance Ministry's Revenue Department 'requested' its employees to 'compulsorily' donate a single day's salary towards the fund every month till March 2021. The employees were requested to provide a written application if they were not willing to contribute, leading to the displeasure of some. (https://www.thehindu.com/news/national/coronavirus-finmin-fiat-to-staff-on-monthly-donations-to-pm-cares/article31383969.ece)
Public, Charity & Trust
Though it was not created by a statute or notification, the PM CARES Fund is officially declared as a public charity trust, a public entity, on the same lines as Prime Minister's National Relief Fund was. Public, charity and trust cannot deny 'transparency'.
Need for PMCARES fund
A media report says: "The justification coming from the government sources is that while PMNRF is for all kinds of natural disasters, new PM CARES fund is specially meant for COVID-19 similar pandemic situations. The government officials also say that any spending from the Consolidated Fund of India needs Parliament's sanction, therefore, creation of a donation-based fund means that legislature hurdle is taken care of." Does it mean that PM Cares is created to bypass Parliament?
The official web page says it is formed with "a primary objective of dealing with anykind of emergency or distress situation, like posed by the COVID-19 pandemic"..
A media report says that minimum donation for PMNRF is Rs 100 while just Rs 10 for one can donate as low as Rs 10 in the PM CARES Fund. But this not stated by PM's official page, which declared the tax exemptions provided to this Fund under IT Act etc.
Contributions towards PM CARES Fund has been declared to be an eligible expenditure under the Corporate Social Responsibility (CSR) obligations. Under CSR, companies must spend 2% of their last year's profit towards social causes.
PM CARES Fund: Accountability & Answerability not 'legal hurdles'
Instead of putting to use the creating a statutorily authorised Fund, the Centre discounted it and floated a new PM CARES Fund. Why? The Parliament has already enacted a legislation guiding the Government as to how can a Fund is created to tackle the disasters. COVID-19 pandemic is a 'disaster' under the Disaster Management Act 2005, within the definition of "disaster," under Section 2(d) of the said Act, which says; Section 2(d) ""disaster" means a catastrophe, mishap, calamity or grave occurrence in any area, arising from natural or man-made causes, or by accident or negligence which results in substantial loss of life or human suffering or damage to, and destruction of, property, or damage to, or degradation of, environment, and is of such a nature or magnitude as to be beyond the coping capacity of the community of the affected area;"
Section 46 of DM Act 2005, deals with "National Disaster Response Fund.—(1) The Central Government may, by notification in the Official Gazette, constitute a fund to be called the National Disaster Response Fund for meeting any threatening disaster situation or disaster and there shall be credited thereto—
(a) an amount which the Central Government may, after due appropriation made by Parliament by law in this behalf provide;
(b) any grants that may be made by any person or institution for the purpose of disaster management.
(2) The National Disaster Response Fund shall be made available to the National Executive Committee to be applied towards meeting the expenses for emergency response, relief and rehabilitation in accordance with the guidelines laid down by the Central Government in consultation with the National Authority."
Accountability and penalties
Section 48 enables the State Governments to create state and district level funds to deal with disasters at their level. It is a statutory Fund, with clear provisions of its proper management by a stipulated committee at every level with accountability and liability. Section 53 prescribes punishment for misapplication of funds. Section 55 deals with offences by departments of the government and section 56 provided for punishing for "Failure of officer in duty or his connivance at the contravention of the provisions of this Act. Section 70 mandates the National and State authorities to prepare "Annual reports" once every year and place them before Parliament or concerned state legislatures.
The officials and legal experts have stated to media persons that PM Cares Fund is created to remove legal hurdles. Whether accountability, submission of annual reports, penalising failures of duty etc in the DM Act are 'legal hurdles'?
The Centre has invoked powers under Disaster Management Act (DM Act) but refused to adopt comprehensive Fund along with accountability and answerability restrictions prescribed in that Act. Under DM Act 2005 Union Government has issued notifications of lock down since March 24, through National Disaster Management Authority. Then why the centre did not choose to use National Disaster Response Fund provisions under the same legislation?
When there is already PMNRF, and statute-backed National Disaster Response Fund, why PM Cares Fund is created? Opposition asked: Why opposition members are not the part of the trustees if this Fund? When there are State Relief Funds separately, why do you need another Fund?
The PM National Relief Fund had a balance of Rs 3,800 crore as on 31 March 2019. Why this fund is not used and why Government did not ask people to donate to this fund? PMNRF has a provision to have a board of trustees which include representative of Opposition parties. PMCARES Fund's board does not provide for it. Another 'hurdle' is removed.
PMNRF https://www.pmindia.gov.in/en/pms-funds/ is also PM centric and a notified the Fund neither under Trusts Act nor under DM Act. PMNRF is not completely transparent. The website contains annual reports of income and expenditure. This also does not reveal who the donors and how money was spent.
Congress President Sonia Gandhi wrote to PM asking for transfer of funds collected under PM CARES to PMNRF to ensure "efficiency, transparency, accountability and audit in the manner in which these funds are allocated and spent". Interestingly even the PMNRF is also not transparent. Except that it has opposition member on board, both the Funds oppose answerability.
https://www.pmcares.gov.in/en/ is another official site for PM CARES Fund- in which the PM's webpage details about this Fund were repeated and further details of giving donations and taking receipt are explained. There are FAQs also. Q9 says:
Q.9 is Who has the powers to formulate criterions for disbursal of funds held under PM CARES Fund? The answer: The Trustees of the PM CARES Fund have powers to formulate rules/criterions for carrying out any of the Objectives of the Trust.
Generally, in a trust owner/donor who create trust will formulate the rules/criterions in spending the trust funds for the beneficiaries. Nowhere, the trustee themselves determine the criterion. As there are a greater number of donors, their representatives, should determine. For instance, Parliament decided the criterion in Disaster Management Act, 2005. If the trustees themselves decided the rules for activity, it should be available for public scrutiny. Trust deed is supposed to contain those details, Denying, it is against the character of trust.
Who will audit?
The official website PM CARES Fund says:
Q.14 Who audits the PM CARES Fund? Answer: The PM CARES Fund will be audited by one or more qualified independent auditor(s) who will be appointed by the Trustees.
This means, the fund activities are not scrutinised by the C&AG, the independent constitutional institutions, not even by an Independent Auditor. The trust board itself will choose its own auditors. The C& AG does not audit PMNRF. Similarly, as per the media report, CAG says it has no prescribed duty to audit the PMCARES Fund. There is a total concentration of entire power in the hands of 'trustees' -PM, FM, Defence Minister, Home Minister plus members appointed by them regarding PMCARES. It is completely one-sided. Whereas PMNRF trustees include President of Congress party, Representatives of FICCI and Tata Trust as members.
The new Fund has been opened for donations from abroad, after it has been exempted from the Foreign Contribution Regulation Act (FCRA). This is another statutory permission which only public entity. Companies Act passed in 2013 specified that eligible funds for CSR included only the Prime Ministers' Relief Fund (PMNRF) and any other fund set up by the Central Government for purposes stated therein. But the State Funds are not included in the list of 'eligible funds' which denies the chances of state funds to get CSR funds. This amounts to discrimination of state funds. The Disaster Management Act 2005 says that contributions from Corporations to States and National Disaster Response Funds will be counted as CSR expenditure. This law provided equal status to both National and State funds. If states float their CM Relief Funds, they will not be entitled to CSR funding. The states and Centre should use the SDRFs and NDRF for better resources, auditing and transparency.
With the Board of one single group of ruling party, it assumes unquestionable authority, i.e., system created monopoly. If it does not ask CAG to audit, it will not. If it decides to request any auditor, they can. The PMCARES Fund is by system, concentrates entire power in themselves, eliminating scrutiny by everyone- ie, they claim not accountable to auditors except those they appoint, they will not allow CAG to audit, they claim not Public Authority to go out of purview of RTI Act, thus denying the transparency liability under RTI Act. Thus comparatively the PM CARES is more opaque than PMNRF, but both refuse to be accountable and answerable. Former Finance Minister Yeshwant Sinha said "Shocking news that C&AG will not audit PM CARES Fund, it was opaque to begin with. Is it going the way of Electoral Bonds". He also added that compared with PM NRF, the new Fund is opaque.
Multiplicity of Funds
Legally speaking all these Funds by PM and CMs in their respective states should merge with NDRFs and SDFRs formulated under Disaster Management Act for legal validity, better management by statutorily stipulated committees and authorities, accountability and liability of officers and departments and transparency under RTI Act. Why centre does not want it?
PMNRF and PM CARES are 'public authorities'
The nature, formation, purpose and its functional character shows that both PM NRF and PM CARES Funds are public authorities under RTI Act, and they should be answerable. In 2012, the PMO rightly considered PMNRF as public authority and furnished information under RTI Act. In 2012 RTI activist Aseem Takyar sought names and particulars of the donors to the Prime Minister's National Relief Fund and the beneficiaries from 2009 to 2011. Neither the PMO nor the PM NRF denied fact of public authority status. The CPIO had provided some and denied some invoking exemption clause. He considered details of the donors and the beneficiaries as personal information; and its disclosure was exempt under subsection 1(j) of section 8 of the Right to Information (RTI) Act.
Administered by PMO
In second appeal the Chief Information Commissioner Satyanand Misra held on 6th June 2012, "since the PM NRF is administered in the office of the Prime Minister in accordance with the policy which is already in the public domain, donations and the names of donors could be revealed unless donor did not want its disclosure and the names of institutional donors should be surely published".
Though PMO accepted PMNRF as public authority before CIC. But the PMNRF filed writ petition before the Delhi High Court challenging CIC Satyanand Misra's order and took a different stand that it was not public authority.
CIC orders release of list of beneficiaries of Delhi Fund
Aseem Takyar filed another RTI request with CMO about 'CM Relief Fund' seeking complete list of the funds, contribution received on account of NCT of Delhi, Chief Minister Relief Fund for some financial years. The CMRF under CM's secretariat did not say CMRF was not public authority. It has furnished the information about contribution and allotments. But appellant wanted list of beneficiaries, and for that he approached CIC Yashovardhan Azad, who did not see any impediment in providing list of beneficiaries and amount details and directed 31st October 2017, that information should be in public domain.
Attributes of public authority
Section 2(h) of the RTI Act says:
"public authority" means any authority or body or institution of self-government established or constituted --
(a) by or under the Constitution;
(b) by any other law made by Parliament;
(c) by any other law made by State Legislature;
(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;"
Though other essentials do not apply to 'Fund', the last parameter "body owned, controlled or substantially financed" will bring the PMNRF within the definition of public authority, as validated by Justice Ravindra Bhatt based on the interpretation of 'control' of Government over the fund. (PMNRF vs Aseem Takyar, Delhi HC 23rd May 2018 https://indiankanoon.org/doc/66482610/)
Ravindra Bhatt, J said:
"that whilst PMNRF does not receive funding from the Central or State Governments, yet, it is administered in the office of the Prime Minister in accordance with the policy which exists in the public domain. This is on the strength of the prestige lent by the Prime Minister, his office and the confidence that is generated that such amounts would be used for funds in the exercise of discretion for many contingencies that the donor may visualize, (or not visualize, but is confident would reach deserving beneficiaries or causes). It has to be emphasized that the appeal to generosity (in seeking donation) inherent through the nature of the fund is the confidence and trust that millions of donor's reposes in the Prime Minister and the office of the prime minister. All those seconded to the office of the fund are public servants; they have no personal stake or interest. Such a fund cannot but be called as a public fund. The Prime Minister has no personal stake or interest in the receipt or disbursement. The disbursement of amounts is towards deserving and noble causes, especially in unforeseen contingencies and calamities. Donations to the fund come from all kinds of sources including, sometimes, State Undertakings, both Central and State. Many such donors may even publicise about their donations in the media".
Justice Sunil Gaur did not agree with Ravinder Bhat and held that Trust does not owe its existence to the Government but is a creation of the then Prime Minister of India in an ex-officio capacity. Supreme Court in Thalappalam Service Co-operative Bank Ltd. & Ors. v. State of Kerala & Ors., (2013) 16 SCC 82, made it clear that a body must be "substantially controlled" by the Appropriate Authority and not merely supervised or regulated, to become public authority. Justice Ravinder Bhat said the control is substantial enough to make it public authority under RTI Act.
Justice Gaur did not recognize that the control of appropriate authority over the Fund was complete and substantial as that alone disburses the funds given by the donors as per its own decision or discretion.
The PMO's control
It is not Narendra Modi's fund, but PM CARES Fund. Under the chairmanship of PM, three cabinet ministers and other trustees nominated by them govern, manage and spend the fund. Its deep control not mere control that the government had over the Fund. Justice Gaur's observation in PMNRF case about control is not in tune with the letter and spirit of RTI Act, which was rightly applied by Justice Ravindra Bhat.
Because of the division of opinion in division bench, the matter was referred to third Judge of Delhi High Court, which is pending since 2018.
The accountability of PM Cares Fund arises out of its origin, operations, nature, funds flow and controls. Because (i) it holds PM's name and created by PM, (ii) it operates within PMO, (iii) the concessions like tax reliefs for donations were granted by state, which amounts to 'substantial funding', the trust headed by PM consisting of 3 cabinet ministers and three others appointed by them. Hence the PM CARES Fund is public authority under RTI Act.
As PMCARES Fund is totally controlled by PMO, it is public authority. If it is a public charity trust, it is governed by Trusts Act, which has to be transparent, and every citizen, in his capacity as beneficiary, has a right to information. If it is a society, under the Societies Registration Act, 1860, it must be transparent. Every donor, either of Rs 10 or a crore, is owner who transferred their 'property' to 'trustee' and hence has right to know the activities and how their fund is utilized. Since breach of trust is a crime, if committed by public servant, he will be punishable, public authority is bound to give information. The PMO is public authority that has entire records of PMCARES Fund, any request for information under RTI Act, cannot be rejected, on the excuse that PMCARES Fund is not public authority. Negating transparency and accountability could be origin of breach of trust.
Views are personal only
Author is a Former Central Information Commissioner