The Indian Government, with an objective to tackle any threat or distress posed by the Covid-19 Pandemic, has set up a public charitable trust under the name of �Prime Minister�s Citizen Assistance and Relief in Emergency Situations Fund better known as the PM CARES Fund. In addition to the Prime Minister National Relief Fund (PMNRF) and the National Defence Fund, this would be the third fund to be organised by the Prime Minister�s Office (PMO). Inevitably, questions regarding the necessity of such a fund were raised due to the existence of an analogous fund, the PMNRF. This article aspires to discuss the fund, its need, scheme and concerns.

The PM CARES fund, although similar to its fraternal twin the PMNRF, however comprises of objectives that disaffiliates it from the latter. Whilst the PMNRF is currently engaged in assisting victims of natural calamities besides riots, accidents and medical insurgencies; the PM CARES FUND was founded to actively procure funds for a public health crisis, such as the Covid-19 which has plagued the nation, and endeavors to pursue means to advance the healthcare and pharmaceutical amenities available and simultaneously fund studies regarding the same. Although both the funds are mutatis mutandis, the resultant expenditure and beneficiaries vary accordingly. Thus, in order to enable focused relief, the aforementioned fund was created.

For A public charitable fund[1], donations are collected via online platforms from willing individuals/organizations as well as contributions as part of CSR[2] from Companies and PSU[3]s in accordance with the Companies Act, 2013. However, a recent concern regarding the collection of monetary resources has risen due to government employees being coerced into parting with a fraction of their salaries towards the funds.

This infringes on the right to wage security and can also garner a wide interpretation under Right to Choose[4]. An added concern is regarding the receipt of foreign funds which is regulated by the FCRA[5]. Mere registration under the same would require a consolidated audit statement of 3 years. However, this has been waived for the PM CARES trust fund, the appropriateness of which may be questioned under Article 14 of the Constitution which assures equality to equals. Thus, the exemption for a particular Fund in contrast to the rules imposed on other funds/NGOs is another issue to ponder over.

Further, as stated in a recent ordinance[6] passed by the President, the PM CARES does not fall under the purview of the CAG[7] and will be audited by independent auditors. This has created uproar as there is scope for corruption and opacity.

However, this issue can be tackled in a two-fold method:

1. As a Charitable fund, PM CARES is legislated upon by the Indian Trusts Act, 1882 (under Section 19) which mandates that an accurate account of trust property (in current scenario, cash) must be presented to the recipient when requested.[8]
2. The Civil Procedure Code[9] (under Section 92) allows a special suit for the protection of Public rights in the Public Trusts and Charities and the conditions for invoking the same were elucidated in C.R. Shivananda & Another v. H.C Gurusidappa & Others[10], which can be applied to the present scenario.

Nevertheless, it is pertinent to note that the executive organ of the government (members of which are the ex-officio representatives of the trust) cannot spend what the legislature cannot vote upon. Thus, regulations regarding the use and collection of these funds must be delved into to avoid future obstacles. In addition, it is also unclear as to whether the members are acting within their personal capacity or as constitutionally claimed office bearers. Further, the introduction of funds such as these may cause jeopardy to localised organisations which will run short on funds due to lack of incentives such as a tax waiver.

The PM CARES being a public charitable trust, which receives donations from private bodies, justifies the refusal to audit by the Comptroller and Auditor General (CAG). However, taking a legal stance, this fund seems to be a needless duplication of PMNRF. Both these funds created are in disarray with articles 266, 283, and 284 of the Indian Constitution. Article 266(2) states that all other funds received on behalf of the Government of India other than the Consolidated and Contingency fund shall be entitled to the Public account of India.[11]

Article 283(1) states that �The custody of the Consolidated Fund of India and the Contingency Fund of India, the payment of moneys into such Funds, the withdrawal of moneys therefrom, the custody of public moneys other than those credited to such Funds received by or on behalf of the Government of India, their payment into the public account of India and the withdrawal of moneys from such account and all other matters connected with or ancillary to matters aforesaid shall be regulated by law made by Parliament, and, until provision in that behalf is so made, shall be regulated by rules made by the President.�[12] The present PM CARES suffers from lack of parliamentary oversight and thus there is a need for a proper set of rules to ensure that Constitutional provisions are not violated.

In furtherance, a PIL[13] was filed by a Supreme Court advocate challenging the Constitutional validity of the PM CARES fund on the ground that it did not follow the scheme enumerated under Articles 266 and 267 of the Constitution and contended that it must be revoked. Nevertheless, the plea was dismissed stating that it was a �misconceived� petition.[14] The month of June has witnessed the Supreme Court providing notice to the central Government in the form of a PIL, stating that the funds and monies in the PM CARES fund must be transferred to the National Disaster Respond Fund (NDRF).

The Taxation and Other Laws (Relaxation of Certain Provision) Ordinance 2020 amends a provision of the Income Tax Act to allow the following benefits.

1. Donations made to the fund shall be eligible for 100% tax deduction under section 80G of the Income Tax Act further, the limit on the deduction of 10% shall not be applicable for the donation made to the fund.[15]
2. The Ordinance authorizes the government�s decision to extend the duration of the dispute settlement scheme for direct taxes (Vivaad se Viswas) till June 30 2020.
3. The extension also applies for making investments, deposits, purchases for the purpose of claiming deduction/exemption in respect of capital gains under sections 54 to 54GB of the Income Tax Act which also extends up to June 30 2020.[16]

An application was filed under the Right to Information (RTI) Act on April 21, 2020 seeking information regarding the donor details from the PMO. However, the PMO refused to provide details stating the application included multiple requests on different topics and was disposed off on the grounds that the demands made by the applicant were �impractical and indiscriminate�. Subsequently, another PIL was filed in the Delhi High Court seeking information regarding monies received and manner of expenditure.

There is no scope for rejecting the RTI request as per RTI Act as the PMO is considered to be a public authority and the information held by it is of national importance unless an exception under section 8 of the act is invoked. [17] Further, as discussed earlier, a body substantially owned, controlled and financed by the Central Government must be considered as a public authority.

The Refusal of the Prime Minister�s Office to disclose information regarding the PM Cares fund by stating that it does not fall under the definition of public authority under the Right to Information (RTI) Act, 2005 was unexpected. The constitution of a public authority has been defined in two parts in Section 2(h) of the RTI Act[18] which are as follows:

The first part states that a public authority includes:

1. body established by the Constitution,
2. body established by any law made by the Parliament,
3. body established by law made by the State Legislature,

 
The second part covers bodies established by a notification or order issued by the government and includes:

1. a body owned, controlled or substantially financed by funds provided by the government and;
2. non-governmental organisations substantially financed by funds provided by the government.

Even though, the PM Cares fund does not fall under the three categories of the first part and category (ii) of the second part since it has not been established by the Constitution nor by Parliament, it can be argued that it falls under the categories - body owned, controlled or substantially financed by the government.[19]

In conclusion, most schemes and trusts are bona fide in nature. However, like the two sides of a coin, every issue has positives as well as negatives that impede it. Yet, transparency is an integral aspect of a democracy and must be guaranteed.

Due to the current situation, hasty decisions are effected to ensure the safety of citizens as that is paramount. However, the exercise of powers must be executed with checks and balances so as to promote amicable relations between the governing and the governed. Thus, although it has accumulated the funds as well as has supported many, the PM CARES is not an exhaustible scheme and has its own share of shortcomings that must be overcome to make the initiative an incontestable success among the citizens.

Endnotes:

1. https://www.pmindia.gov.in/en/about-pm-cares-fund/
2. Corporate Social Responsibility
3. Public Sector Undertakings
4. Article 21, Constitution of India,1960
5. Foreign Contribution (Regulation) Act, 2010
6. THE TAXATION AND OTHER LAWS (RELAXATION OF CERTAIN PROVISIONS) ORDINANCE, 2020
7. Comptroller and Auditor General of India, Article 148 of Indian Constitution
8. Section 19, The Indian Trust Act, 1882
9. Section 92, The Code of Civil Procedure, 1908
10. Regular First Appeal No. 667 of 2001 C/W Regular First Appeal No. 668 of 2001
11. Article 266(2) https://indiankanoon.org/doc/1532561/
12. Article 283(1) https://indiankanoon.org/doc/1220316/
13. Public Interest Litigation, Article 32 of Constitution of India,1950
14. https://www.jurist.org/commentary/2020/05/anshika-saini-pm-cares-fund/
15. https://www.livemint.com/money/personal-finance/pm-cares-fund-what-to-know-about-tax-benefit-offered-to-individuals-corporates-11585744279926.html
16. http://egazette.nic.in/WriteReadData/2020/218979.pdf
17. https://thewire.in/government/pmo-rti-pm-cares-supreme-court& https://www.newindianexpress.com/nation/2020/apr/29/pmo-junks-rti-plea-on-pm-cares-scientific-logic-behind-covid-19-lockdown-2136774.html
18. Section 2(h) of RTI Act, https://rti.gov.in/rti-act.pdf
19. https://www.barandbench.com/apprentice-lawyer/pm-cares-fund-a-public-authority-under-the-rti-act-2005

Written by:

1. Kandeep Shravan and
2. Aparna Prasanna.