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PM CARES Fund Satisfies All Criteria For Being Declared As 'State' Under Article 12 : Shyam Divan Tells Delhi High Court

Akshita Saxena
6 Oct 2021 11:32 AM GMT
PM CARES Fund Satisfies All Criteria For Being Declared As State Under Article 12 : Shyam Divan Tells Delhi High Court
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Senior Advocate Shyam Divan today told the Delhi High Court that the PM CARES Fund satisfies all the criteria for being declared as "State" under Article 12 of the Constitution and that even functionaries like Vice President of India and Cabinet Ministers are under an impression that it is a Government Fund.The development comes in the plea seeking declaration that PM CARES Fund is...

Senior Advocate Shyam Divan today told the Delhi High Court that the PM CARES Fund satisfies all the criteria for being declared as "State" under Article 12 of the Constitution and that even functionaries like Vice President of India and Cabinet Ministers are under an impression that it is a Government Fund.

The development comes in the plea seeking declaration that PM CARES Fund is "State" under Article 12 of the Constitution. This comes after the Prime Minister's Office(PMO) refused to divulge information about the Fund under the Right to Information Act, 2005.

The Bench of Chief Justice DN Patel and Justice Jyoti Singh today commenced hearing of the plea filed by one Samayak Gangwal, challenging the PMO's order rejecting his RTI application stating that PM CARES was not a "public authority" within the meaning of Section 2(h) of the RTI Act.

Divan took the Bench through several communications made by the Vice President of India, the Defence Ministry and other high functionaries of the Government including the Cabinet Ministers and Under Secretary to the Governments. These communications are requests to the public/ employees to donate to the PM Cares Fund.

The Petitioner's case is that these communications brand the PM CARES Fund as a a dedicated "national fund", "set up by the Government of India" to combat the distress situation.

"We are drawing sustenance from each of these communications. They are themselves saying that PM Cares is established under the Govt of India. These are very thoughtfully drafted communications," Divan argued.

He added,

"We are not saying that PM Cares is bad but it must fall within discipline of Constitution. Anyway the Vice President, the Ministers, and PM Cares itself thinks that its a Govt Fund."

Government Functionaries cannot contract out of Constitution

At the outset, Divan submitted Constitutional functionaries cannot "contract out of Constitution" until they are holding office.

"Constitution is an elastic and extends across India and to all functionaries," he remarked.

He added, "In your private capacity you can do it. But in your capacity as a member of the legislature can you create structures that are immune from constitutional oversight? Even in executive, can a Collector in his official capacity create a Trust and say that it's a private trust? This also applies to Judiciary...Creating structures, giving immunity in terms of who the donors are and nothing to be disclosed to the general public is an extraordinarily unhealthy precedent."

He then referred the Court to the "Deed of Trust" for establishment of PM Cares Fund which was executed by the Prime Minister of India who is also the ex-officio Chairperson of the Trust.

He argued that such a high govt functionary cannot create a structure which is apparently outside the reach of our Constitution.

"The Fund is being projected to the world as being a part of Govt of India. Immediately, the Constitution springs into action and a whole set of consequences follow in the form of accountability like judicial review, parliamentary oversight, CAG audit, etc.," he submitted.

He added that the Fund is established in "public interest" and beholds a "permanent character" which goes on to show that it is a Government Fund. He said,

"The Fund has a "public purpose" of widest objective. Settler is no one less than Prime Minister of India. Using PM's name becomes a Government Fund by itself...This Fund will run in perpetuity in public interest. So it will work in tandem. It is working in parallel with Govt. I ask the converse question now. What is it in PM Cares Fund that it's private?"

Deep Pervasive Control

Divan informed the Bench that the Board of Trustees of the PM Cares Fund comprises of 4 ex-officio persons including the Prime Minister and only 3 other persons.

"I am focusing on involvement of ex-officio functionaries for administrative convenience. The moment you are ex-officio, by virtue of office the Constitution attaches," he submitted.

He relied on the case of Pradeep Kumar Biswas v. Indian Institute Of Chemical, where a 7-Judge bench of Supreme Court was posed with a query whether CSIR is an "authority" under Article 12 of the Constitution.

In this case, the Top Court had taken into consideration factors like dominant role played by the Government of India in the Governing Body of CSIR, Prime Minister is the ex-officio President of CSIR, etc., and it ultimately held that the control of the Government in the CSIR is ubiquitous.

On this note, Divan argued,

PM Cares falls under "Other Authorities" expression in Article 12 of Constitution

Divan argued that PM Cares Fund should be declared as State within expression "other authorities" under Article 12 of the Constitution. In this regard he cited the case of Rajasthan SEC v. Mohan Lal where it was held that expression "other authorities" should not be construed narrowly.

He also relied on Ajay Hasia Etc v. Khalid Mujib Sehravardi where the Supreme Court had laid down pointers for deciding whether an instrumentality is State under Article 12. These include:

  • Financial assistance of the State is so much as to meet almost entire expenditure of the corporation;
  • Existence of deep and pervasive State control;
  • Functions of the corporation of public importance and closely related to governmental functions.

To satisfy the first pointer, Divan submitted that the office of PM Cares Fund could have been established anywhere but it is in Prime Minister's Office. Officers assisting it are also from PM's Office. So entire apparatus is in PM's office.

"That takes care of indirect expenditure, financial assistance and physical location which would all show it is completely impregnated of Govt character," he said.

Presence of four ex-officio members in the Trust was argued to show deep pervasive control.

On the third pointer he submitted that the PM Cares Fund will run in perpetuity in "public interest" to quell public health emergencies and other disasters.

Other Indicators

Divan also highlighted that the use of national emblem by PM Cares conveys an "official sanction" and sends a message to the people that it "belongs to your Government" and that it will be subject to discipline under the Indian laws.

Divan also referred the Bench to how the PM Cares Fund was first declared to the public: "It was pushed out by the office of Prime Minister of India. It uses a Government of India web portal. There is exemption for donations under the Income Tax Act."

The hearing will be continued on October 18. 

Background

The Petitioner seeks declaration of the PM CARES Fund as a State. This he said, would attract consequential directions for: (i) disclosing the Fund's audit reports periodically; (ii) disclosing the Fund's quarterly details of donations received, utilization thereof and resolutions on expenditure of donations.

In the alternative it is contended that in case PM CARES Fund is not a State under Article 12, then: (i) Centre should widely publicize that PM CARES is not a Government owned fund; (ii) PM CARES Fund should be restrained from using "PM" in its names/ website; (iii) PM CARES Fund should be restrained from using the State Emblem; (iv) PM CARES Fund should be restrained from using the domain name "gov" in its website; (v) PM CARES Fund should be restrained from using PM's Office as its official address; (vi) Centre should not extend any Secretarial Support to the Fund.

The PM CARES Fund on the other hand has objected to maintainability of the petition, stating that alternative statutory remedies are available to the Petitioner under the RTI Act, 2005.

On merits, the Fund reiterates that it is not "public authority" within the meaning of Section 2(h) of the RTI Act inasmuch as the mandatory statutory requirements of the provision are not in existence. "There is no control of either the Central Government or any State Government/s, either direct or indirect, in functioning of the Trust in any manner whatsoever," the Fund claims.

No Control Of Central Or State Govts In Functioning Of PM CARES Funds Trust : PMO Tells Delhi High Court

It is further claimed that the Trust functions with transparency and its funds are audited by an auditor who is a Chartered Accountant drawn from the panel prepared by the Comptroller and Auditor General of India.

Significantly, the Supreme Court had last year observed that there is no occasion for audit of PM CARES Fund by the Comptroller & Auditor General of India as it is a public charitable trust.

Case Title: Samayak Gangwal v. CPIO, PMO

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