What is the PM Cares Fund and does it come under RTI?

*What is the PM Cares Fund and does it come under RTI?*

In reply to an RTI query filed to seek information about the PM Cares Fund, the Prime Minister’s Office denied information citing the ground that it is not a public authority. Further, the PMO added, “However, relevant information in respect of PM-CARES Fund may be seen on the website pmcares.gov.in.”. What was sought under RTI was the composition of the trustees of PM Cares Fund, copies of the trust deed, and all government orders, circulars, and notifications related to its creation and functioning.

Disclosures on the PM Cares Website

The PM Cares Fund on its website declares the following:

‘Keeping in mind the need for having a dedicated national fund with the primary 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 public charitable trust under the name of ‘Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund’ (PM CARES Fund)’ has been set up.’ 

The website further declares that the fund has been set up merely for public purpose in times of distress like the current public health emergency.

The Constitution of the Trust is as follows:

• Prime Minister is the ex-officio Chairman of the PM Cares Fund and Minister of Defence, Minister of Home Affairs and Minister of Finance, Government of India are ex-officio Trustees of the Fund.

• The Chairperson of the Board of Trustees (Prime Minister) shall have the power to nominate three trustees to the Board of Trustees who shall be eminent persons in the field of research, health, science, social work, law, public administration, and philanthropy.

• Any person appointed a Trustee shall act in a pro bono capacity.

The constitution of the said Trust/Fund gives complete power to the Prime Minister to nominate the other three trustees of the board of trustees which renders the appointment of the trustees totally under the control and discretion of the Prime Minister’s office.

Amendment of Companies Act through notification

Through a notification brought in by the Union Ministry of Corporate Affairs in May. Sub-section (1) of section 467 of the Companies Act, 2013, has been amended to make PM CARES fund (Prime Minister’s Citizen Assistance and Relief in Emergency Situations Funds) eligible to receive CSR (corporate social responsibility) funding from corporates. The notification states, “In Schedule VII, item (viii), after the words ‘Prime Minister’s National Relief Fund’, the words ‘or Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund)’ shall be inserted,”. (Notification available at (http://www.mca.gov.in/Ministry/pdf/Circular_29032020.pdf)

Part 2:

Does the notification bypass the Parliament?

The notification is released by the Government of India to accommodate the Fund to receive CSR funds from the corporates and also give tax exemptions. If the fund was formed without any legislation, then legitimising it with the notification to receive CSR funds through an amendment in the Companies Act will surely raise serious questions. 

In the absence of the amendment to the Company Law, the corporate donors would have no good reason to donate their money to the Fund. The PM Cares Fund is to be controlled by the government and the website giving the details of the fund is deemed notification in this regard i.e. of formation of the fund, thus satisfying S.2(h)(d)(i) of the RTI Act. The website information is deemed public notice. The formation of the Trust can thus be said to be bypassing the Parliament.

PM Cares not the same as PMNRF

The PM Cares Fund is not the same as the Prime Minister’s National Relief Fund (PMNRF) and therefore has been widely criticised by members of the civil society and opposition because the Constitution does not have any members of civil society or opposition members as part of the trust and the civil society members of the trust are to be chosen solely by the ex-officio Chairman, the Prime Minister, as declared on the website.

CAG cannot audit

The office of the Comptroller and Auditor General of India, CAG, is not eligible to audit the fund for the premise that it is based solely on donations of individuals and organisations. The government has stated that independent auditors will be appointed by the trustees which would audit the fund. The manner of formation of the Fund gives enough reason to believe that the PMO has assumed the Fund to be legally analogous to a Society/Public Trust formed under the relevant laws, though itself not formed/registered under the provisions of any statutes providing for formation of a public trust.

Is Constitutional law excepted?

The democratic system in India rests on the foundation of constitutional law. Any constitutional office derives its powers and duties conferred on it by either the constitution or the legislation made by the Parliament, the highest legislative body of the country. All executive powers too are derived from statutes or are constitutionally inherent. The PM Cares fund creates an exception to these set principles of constitutional law and the ensuing democratic functioning.

How it carves out an exception?

Under the prevailing laws, any member/s of the public who want to float a fund for public welfare has to register as a society under the Societies Registration Act 1860 or under any relevant public trusts Act or any State or Central law. All these laws provide for accountability and measures to avoid any misappropriation and also provisions for removal/dismissal of trustees with ample power given to the State which is the default regulatory authority.

The PM Cares Fund is declared by the website to be a Public Trust wherein the PM is the ex – officio Chairman. The Trust is neither registered under any Public Trust Law or the Societies Registration Act 1860 or any other law, therefore, the total control on the money donated by the public and the corporate is self-conferred, which is unprecedented.

The public is the beneficiary of the Trust

Being declared a Public Trust, the fund is meant to be used for the welfare of the public, and the general public de facto becomses the beneficiary and the Prime Minister along with the other members are the trustees of the said Fund. As per trust law, it is well settled that the trustees hold the property, in trust, for the beneficiaries, and are accountable to the beneficiaries. The statutes which govern such trusts always include provisions of accountability of the money as well as accountability of the governance of the trust. The PM Cares Fund creates an exception to this well-settled doctrine of trustees and beneficiaries.

A ‘Public Trust’ which is ‘Private’

Considering the above exceptions, the PM Cares fund can be said to be a ‘public trust’ which is ‘private’. ‘Public’ because the money is donated by the citizens and the corporates and private because it is inherently immune to any disclosure to the public as is the attribute of a ‘private trust’. What is notable is that the Trust is not floated by Mr.Narendra Modi but by the Prime Minister of India. It creates new definitions and when the Supreme Court dismisses a petition questioning the formation of the said Trust/Fund, it becomes all the more concerning. However, if the fund on grounds of being formed by the government is immune to judicial review, it gives more reasons for it to be considered as a fund raised by the government and being akin to any fund raised under provisions of any statute/s passed by the Parliament. 

Can PM Cares Fund wriggle out of the disclosure under the RTI Act?

Information about the fund was denied under the RTI Act 2005, citing the ground that the ‘PM Cares fund is a Public Trust and therefore not a public authority as envisaged by the Act. Can it be denied on these grounds? 

S.2(h) of the RTI Act 2005 defines “public authority” as follows:

“public authority” means any authority or body or institution of self- government established or constituted— 

(a) by or under the Constitution; 

(b) by any other law made by Parliament; 

(c) by any other law made by State Legislature; 

(d) by notification issued or order made by the appropriate Government, and includes any —

 (i) body owned, controlled or substantially financed; 

(ii) non-Government organisation substantially financed, directly or indirectly by funds provided by the appropriate Government; 

The PM Cares Fund is definitely a body/authority, but not formed by or under the constitution, so it does not satisfy S.2(h)(a). The Fund has not been made by ‘any other law made by the Parliament’ and the Fund, therefore, does not satisfy S.2(h)(b). The Fund has not been made by ‘any other law made by the State Legislature’ and therefore the Fund does not satisfy S.2(h)(b) and since no notification was issued by the appropriate government it also does not satisfy S.2(h)(c) of the Act. Also, the Fund is not substantially financed by the Government. This is the logical argument which can be read from the denial under RTI.