PM CARES Fund
PM CARES Fund
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[Breaking] No need to transfer COVID-19 relief money from PM CARES Fund, no statutory prohibition on contributions to NDRF: Supreme Court

The Court held that contributions to the PM CARES Fund, which is in the nature of a charitable trust, are voluntary.

Shruti Mahajan

The Supreme Court today refused to direct the transfer of money collected under the PM CARES Fund set up for COVID-19 relief to the National Disaster Response Fund (NDRF).

The Bench of Justices Ashok Bhushan, R Subshash Reddy, and MR Shah also held that contributions to the PM CARES Fund are voluntary, and that there was no statutory prohibition on contributions made to the NDRF.

R Subhash Reddy, Ashok bhushan, MR shah
R Subhash Reddy, Ashok bhushan, MR shah

Further, the Bench clarified that funds collected under the PM CARES Fund are entirely different from the NDRF, and were funds of a charitable trust. The Court held:

"The funds collected in the PM CARES Fund are entirely different funds which are funds of a public charitable trust and there is no occasion for issuing any direction to transfer the said funds to the NDRF."

The Court noted that there was no statutory prohibition as regards the government utilizing the NDRF towards COVID-19 relief nor was there any statutory prohibition on individuals or institutions from making a contribution towards NDRF. Therefore, the prayer made by the petitioner for transferring of all the funds collected in the PM Cares Fund to be transferred to the NDRF was rejected by the Court.

"Any contribution, grant of any individual or institution is not prohibited to be credited into the NDRF and it is still open for any person or institution to make contribution to the NDRF in terms of Section 46(1)(b) of the Act, 2005. The contribution by any person or by any institution in PM CARES Fund is voluntary and it is open for any person or institution to make contribution to the PM CARES Fund."

The Court was answering the questions formulated in the matter pertaining to the utilization of the PMCares Fund vis-a-vis the NDRF which were:

  • Whether Union of India is obliged to utilise National Disaster Response Fund created under Section 46 of the Act for the purpose of providing assistance in the fight of COVID-19?

  • Whether all the contributions/grants from individuals and institutions should be credited to the NDRF in terms of Section 46(1) (b) of the Act rather than to PM CARES Fund?

  • Whether all the funds collected in the PM CARES Fund till date be directed to be transferred to the NDRF?

The Court, while dismissing the petition, observed that the NDRF is a statutory fund set up to assist States should their expenditure be in excess of the SDRF amount. This fund statutorily is required to be audited by the CAG. On the other hand, the PMCares fund was set up as a public charitable trust when the COVID-19 pandemic hit India.

The PMCares Fund consists completely of the voluntary donations made to it and does not get any budgetary support or allocation, nor is any government money credited to this fund. Observing the nature of this fund, the Court said,

"After outbreak of pandemic COVID-19, need of having a dedicated national fund with 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 fund was created by constituting a trust with Prime Minister as an exofficio Chairman of PM CARES Fund, with other exofficio and nominated Trustees of the Fund."

On the petitioner's prayer to set up a National Plan for COVID-19, the Court held that plan prepared by the Centre is sufficient to cater to the pandemic. The judgment, in this regard, reads as:

"National Plan, 2019 have already been there in place supplemented by various orders and measures taken by competent authorities under Disaster Management Act, 2005, there is no occasion or need to issue any direction to Union of India to prepare a fresh National Plan for COVID-19."

As regards the prayer for laying down minimum standard of relief, the Court held that the guidelines issued under Section 12 of the DM Act providing for minimum standards of relief hold good for pandemic COVID-19 also.

The petitioner, in the plea, had claimed that the new Fund created circumvents the National Disaster Management Act.

The MHA had argued before the Court that the PM CARES fund was a public charitable trust and whoever wants can voluntarily donate in it. This submission was contested by Senior Counsel Dushyant Dave, representing the petitioner, who highlighted that while nobody's bona fides were under the scanner, the only question was pertaining to the circumventing of the law for setting up of the PM CARES Fund.

The audit mechanism of the PM CARES was also questioned, with Dave pointing out that the NDRF has to be audited by the Comptroller and Auditor General (CAG) while “PM CARES is audited by some private auditor". A strong argument was made for the PM CARES Fund to at least be audited by the CAG.

Senior Advocate Kapil Sibal, who was appearing in a connected matter related to drawing up a National Disaster Management Plan, said that since contributions to PM CARES are eligible for Corporate Social Responsibility (CSR) benefits, corporates and others would not have incentive to donate to the NDRF.

The petition filed by CPIL also raised the issue of drawing up a National Plan under the Disaster Management Act in the face of the COVID-19 pandemic. Solicitor General Tushar Mehta had produced this plan before the Court at an earlier instance.

The Centre, in its affidavit filed in the matter, defended the creation of the PM CARES Fund and opposed the transfer of these funds to the NDRF. The affidavit says,

“There does exist a National Disaster Response Fund as stipulated under Section 46 of Disaster Management (DM) Act, 2005 which so far consisted of the fund in the form of budgetary provisions made by the Central Government in NDRF and State Governments and Central Government in State Disaster Response Funds without any private contribution.”

It was earlier revealed through a Right to Information (RTI) response received by a lawyer that the Fund does not come under the scope of "public authority" under the RTI Act.

In effect, the denial of the PM CARES Fund as a public authority shields it from the ambit of the RTI Act, and consequently, no citizen can obtain details pertaining to the Fund through the RTI route.

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