Transparency in the ‘PM Cares Fund’
Written by Anshika Sharma [i] and Advait Helekar [ii]
Students of ILS Law College, Pune
Disclaimer: Please note that the views expressed below represent the opinions of the article's author. The following does not necessarily represent the views of Law & Order.
The Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (“PM CARES Fund”) was launched on March 28, 2020 with the aim of dealing with emergency situations, such as the one posed by the COVID-19 pandemic and to provide relief to those that are affected by it. This fund has been registered as a Public Charitable Trust under the chairmanship of the Prime Minister of India.
Recently, The Supreme Court refused to entertain a petition seeking to quash the decision of setting up the PM CARES Fund. The bench disagreed with the contention that the fund was not created in accordance with Article 266 and 267 of the Constitution. The question on the transparency of this fund still persists. This Article seeks to analyze the transparency and the liability of the PM CARES Fund in depth.
Right to information
Recently, the Prime Minister’s Office clarified that the PM CARES Fund is not a public authority. Therefore, it is not considered as a Public Authority within the ambit of Section 2(h) of the Right to Information Act, 2005 (“RTI Act”). Thus, it won’t be liable to divulge information sought in the application made under Section 6 of the RTI Act.
Since the ratification of the Universal Declaration of Human Rights, 1948 (“UDHR”), its principles are imbibed while interpreting the laws of the country. Article 19 of the UDHR states; every person has the right of freedom of opinion and expression and this right includes the freedom to receive and impart information. The same right is reflected in Article 19 of the Indian Constitution. A clear corollary can be derived that, to exercise freedom of opinion one must have freedom to receive information. The same principles have been reiterated in cases as early as in, Raj Narain v. Indira Gandhi Nehru which states that the people of the country have a right to know every public act that is done in a public way, by their public functionaries.
In the State of U. P. v Raj Narain, Justice Mathew states that, it is not in the interest of the public to cover with a veil of secrecy the common routine business and it is the responsibility of officials to explain and to justify their act. It is the chief safeguard against oppression and corruption. It can be inferred that in a healthy democracy the people should have a right to express/ comment on every public act. Therefore, it is necessary that everything that is done in a public way, by their public functionaries should be made available to the public.
The same ‘right to know’ or ‘right to information’ has been reflected in several Articles in the Constitution such as Article 19 (1) (a) & Article 21. Interpreting Article 19(1) (a), Justice V. R. Krishna in S. P. Gupta case, observed that the right to express their thoughts is meaningless if it’s not accompanied by a related right to secure all information on mailers of public concern from relevant public authorities; people had the right to know about every public act, and the details of every public transaction undertaken by public functionaries. Hence to exercise proper right to opinion or expression guaranteed under Article 19 (1) (a) the public must have access to every public transaction undertaken by the public functionaries. Hence it is imperative that public resources are not handled without the knowledge of the public.
The inception of the RTI Act was to increase public accountability. Hence it is logical that various provisions of this Act should be interpreted in the light of this object. The term Public Authority has been defined in Section 2(h) of the Act. If interpreted strictly, PM CARES Fund won’t fit into the definition. However, on reflecting upon the object of the Act, a more inclusive definition must be adopted.
In the landmark case of Ajay Hasia v. Khalid Mujib Sehravadi a test was laid down to define the term ‘public body’ rather than ‘public authority’. The test laid down determines whether the said person, or body was an instrument of the state rather than how it was brought into existence. The object of the PM CARES Fund is to deal with the COVID-19 pandemic, any emergency or distress situation, and to provide relief to those affected by such situations. Article 267 already prescribes the creation of a ‘Contingency Fund.’ The same fund is for the purpose of ‘meeting unforeseen expenditure’ which may arise. The expenditure arising from the COVID - 19 pandemic could be met out of this Contingency Fund. Therefore, it can be concluded that the PM CARES Fund is acting as a state instrument, just as the Contingency Fund would have.
The judgment was given in the context of Article 226 of the Constitution and not the RTI Act. However, there is no apparent reason to distinguish between the two. The courts have opted for an inclusive interpretation of ‘Public Authority’ to increase public accountability. In Hindu Urban Cooperative Bank Limited case, the Punjab & Haryana High Court has laid down certain additional qualifications to qualify an institution as a Public Authority such as (i) their public dealing, (ii) preamble, aims, objects and regime of the Act & (iii) the larger public interest. As mentioned above, the PM CARES Fund is undertaking the public function of meeting the unforeseen expenditure resulting from the pandemic. Furthermore, it would be in the larger public interest to disclose the accounts of the PM CARES Fund. There should thus, be no detriment in disclosing the same.
Issues pertaining to the Foreign Contribution (Regulation) Act, 2010
As per the FAQ’s furnished on the official website, PM CARES Fund has received exemption from the operations of the provisions of the Foreign Contribution (Regulation) Act, 2010 (“FCRA”). The main object of the FCRA is the regulation of the receipt and usage of foreign donations made by foreign associations or individuals in India. Section 50 of the FCRA mandates that if Central Government opinionated that it’s necessary in the interests of the public, then it can by an Order and subject to the conditions in the order, exempt any individual or association from the operations of all or certain provisions of the FCRA. Interestingly, no such Order has been issued by the Ministry of Home Affairs (“Ministry”) in the Gazette to curtail the application of FCRA to PM CARES Fund. The online portal of the FCRA services under the Ministry also does not furnish any such Order.
Further, The PM CARES Fund does not fall within the ambit of the Exemption Order issued on January 30,2020 under Section 50 of the FCRA as this order exempts the application of the FCRA to all organizations that are constituted and wholly owned by the government and are required to have their accounts audited by the Comptroller and Auditor General of India (“CAG”) or any of the agencies of CAG. The official website of PM CARES Fund clarifies that the Fund will be audited by independent auditor(s). The exemption of PM CARES Fund from the FCRA in the absence of an Order by the Central Government reflects a procedural fallacy which leads to the violation of Section 50 of the concerned Act.
Additionally, the absence of an Order under Section 50 of FCRA for exemption of the PM CARES Fund has several constitutional consequences. Such absence of an order cannot escape from the vice of arbitrariness. In Shrilekha Vidyarthi v. State of Uttar Pradesh, the apex court held that
‘When a mode is provided to do an act and there is no obstacle in following that mode, then non-performance or performance in a manner otherwise without any rationale may itself attract the vice of arbitrariness. It further stated that all actions of the State must be reasonable and that the rule of law demands for the governance by the legal framework and not at the whims and desires of the people entrusted with the government authority.’
The government’s act of not following the procedure specified under Section 50 of FCRA and giving the exemption to the PM CARES Fund without issuing an Order is a violation of law and is uninformed by reason which results in arbitrary behaviour. Such arbitrary behaviour thus results in the violation of Article 14 of the Constitution.
Further, in State of U.P. v. Renusagar Power Co. the Supreme Court held that the ‘exercise of legislative or administrative power will be set aside if it is manifestly arbitrary’. Therefore, such an act of the government which violates Article 14 must be set aside to ensure compliance with Section 50 of FCRA.
Absence of the Order also hampers a person’s right to information which is a fundamental right under Article 19(1)(a). The public is devoid of the information pertaining to the intelligible reason why the PM CARE Fund has been exempted from the provisions of FCRA. Thus, the absence of the order also violates Article 19(1)(a).
In a healthy democracy, the people should have the right to know about the conduct of its officials. Hence, the authors are of the opinion that for the purpose of transparency, the accounts of the PM CARES Fund should be made public and therefore the RTI Act should be made applicable on the same. Furthermore, the exemption of the PM CARES Fund shall be in compliance with the provisions of the FCRA to ensure that the act of the government is not a subject of administrative arbitrariness.
 PM-CARES Fund ‘Not a Public Authority’, Doesn't Fall Under RTI Act: PMO, Government, The Wire (May 31, 2020), https://thewire.in/government/pm-cares-fund-not-a-public-authority-rti-act-pmo.  §2(h), The Right to Information Act, 2005, No. 22 of 2005.  Universal Declaration of Human Rights, art. 19, G.A. Res. 217(III) A, U.N. Doc. A/RES/217(III) (Dec. 10, 1948).  Raj Narain v. Indira Gandhi Nehru, 1975 SCC (2) 159.  State of U.P. v. Raj Narain, AIR 1975 SC 865.  S.P. Gupta v. President of India and Ors., AIR 1982 SC 149.  Ajay Hasia v. Khalid Mujib Sehravadi, AIR 1981 SC 487.  About PM CARES Fund, PM Cares Fund, https://www.pmcares.gov.in/en/web/page/about_us (last visited July 10, 2020, 10:30 AM).  India Const. art. 267.  The Hindu Urban Cooperative Bank Limited v. The State Information Commission, C.W.P. No. 19224 of 2006.  Frequently Asked Questions (FAQ’s), PM CARES FUND, https://www.pmcares.gov.in/en/web/page/faq ( last Visited July 23, 11:45 AM).  §50, Foreign Contribution (Regulation) Act, 2010, No. 42 of 2010.  FCRA Online Services Portal, Ministry of Home Affairs, https://fcraonline.nic.in/home/index.aspx (last visited July 10, 2020, 10:45 AM).  FCRA Order, Ministry of Home Affairs. S.O. 459(E), (Jan. 30, 2020), https://fcraonline.nic.in/home/PDF_Doc/fc_notice_12022020.pdf  Kumari Shrilekha Vidyarthi v. State of U.P, 1991 AIR 537.  State of U.P. & Ors. v. Renusagar Power Co. & Others, 1988 AIR 1737. BIBLIOGRAPHY
1. Universal Declaration of Human Rights, 1948
2. Right to Information Act, 2005
3. Foreign Contribution (Regulation) Act, 2010
4. The Constitution of India, 1950
1. Raj Narain v. Indira Gandhi Nehru
2. State of U. P. v Raj Narain
3. S.P. Gupta vs President of India and Ors
4. The Hindu Urban Cooperative Bank Limited v. The State Information Commission
5. Ajay Hasia v. Khalid Mujib Sehravadi
6. Kumari Shrilekha Vidyarthi v. State of U.P.
7. State of U.P. & Ors v. Renusagar Power Co & Others
1. FCRA Online Services Portal, https://fcraonline.nic.in/home/index.aspx .
1. Ministry of Home Affairs, Order dated January 30, 2020