Can PM CARES Fund be called a public fund, if not ‘State’ under Art 12 of Indian Constitution?

If not ‘State’ despite using government property, the PM CARES fund can be called a public fund under section 2(h)(d) of RTI Act of 2005.

Yesterday, the Union Government had submitted an affidavit in the Delhi High Court stating that PM CARES Fund cannot be called a ‘State’ under the Constitutional Article 12. The affidavit was filed in response to an RTI filed by Lawyer Samyak Gangwal. Gangwal had sought the declaration of the fund as ‘State’ to ensure transparency.  

It has again sparked controversy and confusion about the nature of the fund. Opposition is also questioning the need of creating a separate fund when PM’s National Relief Fund already existed.

The argument of PMO on Consolidated Fund of India

According to the official website, both tax and non-tax revenues received by the government are credited into the Consolidated Fund constituted under Article 266 (1) of the Constitution of India.

Similarly, all government loans obtained from foreign governments and international institutions (external debt) are credited into the Consolidated Fund. All expenditure of the government is incurred from this fund. No amount can be withdrawn from it without Parliamentary authorisation.

The argument raised by the PMO that the PM Cares Fund does not fall under the ambit of the Consolidated Fund of India is acceptable to an extent. But then corporates, including public enterprises have given donations to the fund by deducting employee salaries. The PMO official also mentioned the appointment of an auditor from the panel made by the CAG India.

The second argument makes the fund liable to RTI and accountable to citizens as an official from the constitution-authorized body is involved. They must answer questions about the audit report to ensure transparency. The Comptroller and Auditor General (CAG) of India is the Constitutional Authority in India, established under Article 148 of the Constitution of India. Also, under the provision of RTI ACT, the fund can be called a public or government fund as it is ‘controlled’ by the government officers even if in an ex officio capacity.

Usage of government property in PM CARES Fund

For the moment, let us consider that the PM CARES Fund is a fund build by private donations for Covid-19 relief and is not a subject of Consolidated Fund to be called ‘State’ under the Indian Constitution.

Can PM CARES Fund be called a public fund, if not 'State' under Art 12 of Indian Constitution
Source: PM Cares Fund Website

But the PM office in the South block is mentioned as the official address of the fund on the website. Therefore, it can also be called an initiative ‘controlled’ {Sec 2(h)(d)(i)} by the government official as ex-officio members appointed by Modi and other ministers and managed from PM’s office in South block.

Based on this particular argument, the PM CARES Fund can be called a public fund, if not a ‘State’ fund. Besides, the domain name of the fund’s website uses gov.in. Earlier, an RTI was also filed on using the government domain name, but the NIC did not disclose information citing the involvement of a third party as a reason.

Is PM CARES a Public Fund?

It is not the first time that the Central government is in a fix about the nature of the fund, which was advocated and promoted by PM Modi himself. Since 2020, the officials are avoiding questions about the nature of the fund. According to the government official, it is a fund generated by private donations. PMO has stated that under Sec 2 (h) of the RTI Act, the fund cannot be called a public authority.

Therefore, drawing the inference of the above-mentioned argument along with the Consolidated Fund argument, the government has also rejected the claim of calling it a ‘State’ under the Constitution. The Under Secretary of the PMO has also said that no amount from the fund is credited to the Consolidated Fund of India.

As per the trust deed of the fund, the Prime Minister of India and Minister of Defence, Finance, and Home Affairs are members (ex-officio) of the board of Trustees.

The deed released in December 2020 mentions that PM CARES Fund was established as a public charitable trust. However, it does not exempt the fund from the purview of the RTI Act. Earlier, the Bombay High Court stated that public charitable trusts would be under the ambit of the RTI Act if they fulfil the condition of the sub-clauses (i) of Section 2(h) (d). Based on this, the PM CARES Fund can also be stated as a public fund.

What is Sec 2(h) of the RTI Act?

The RTI Act of 2005 defines the term ‘public authority’ under the Section 2 (h) as ‘any authority or body or institution of self-government established or constituted’ —

  1. by or under the Constitution;
  2. by any other law made by Parliament;
  3. by any other law made by State Legislature;
  4. by notification issued or order made by the appropriate government and includes any—
  • body owned, controlled, or substantially financed;
  • non‑government organisation substantially financed, directly or indirectly by funds provided by the appropriate government;

If the ambit of the mentioned section of the act is studied carefully, it can be seen that PM CARES has stayed clear under the sub-section of (a), (b), and (c). But under the sub-clause (i) of sub-section (d), the fund can be called a public fund under the purview of the RTI Act of 2005.

The term ‘owned’, ‘controlled’, or ‘substantially financed are not mutually conclusive, the Delhi High Court had earlier clarified in the NSE case. The deed mention that the fund is managed by the PM and other ministers. They are the ex-officio trustees of the fund and can appoint three other members from law, health, and others. It is an accepted position.  

The term ex-officio means that the member is holding the position against the name of their office. The argument stated in the trust deed mentions that the government cannot be said exercising control on the fund as some of its officials are holding office in an ex-officio capacity. In a landmark case of the Indian Institute of Chemical Biology versus PK Biswas, the Supreme Court has stated that if the government can appoint or terminate a secretary or other members, it means that the government is exercising control over the organisation.

Officials appointed by the minister manage PM CARES. The PMO officials look after the management and the PM CARES Fund regulation in a pro-bono capacity.

Thus, it is irksome to believe the PM CARES Fund is a private-donation-based fund. It does fall under the purview of people’s questions and doubts.   

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