PM CARES Fund: Transparency can’t be denied by a whip hand

[This is a guest post by Aditya Kumar Srivastava.]

Before delving into the actual degree of care, which the present Government of India had attempted to reflect by creating “Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund” (hereinafter as Fund), I would not be surprised if somebody, spiritually-attached to this government, counters me, irrationally.

Although this government is always at loggerheads with its opposition in all other matters, they have adopted a similar ^[1] but more opaque mechanism to create the Fund, claiming it to be an urgent financial tool to fight against the COVID-19 pandemic. According to me, any mechanism adopted by a democratically-elected government becomes an opaque action as and when it lacks the requisite transparency. In a Democratic Republic like India, transparency forms the cornerstone of Public Confidence and any denial of the same would shake the entire edifice of that confidence. In order to strengthen such edifice and commit fewer opaque actions every democratic government should disclose all the relevant details of their works to the associated beneficiaries. For this purpose a number of statutes have been enacted by the central as well as the state legislatures- the Right to Information Act, 2005 being one of them. On the other hand, non-disclosure of such details does not form a strong legal ground to challenge these actions. A mere breach of legal duty does not form a reasonable ground for seeking any remedy unless it results in the violation of a legal right. The infringement of a legal right is the sine qua non for seeking any remedy. Under the subsequent headings, I would be in a process of transmitting light through one such opaque-action adopted by the present government in the name of Fund.

Origination, Nature, and Management of the Fund:

Though this Fund had not been created by any statute of the parliament or by the government, its genesis can be attributed to an appeal made via press note and also through a series of tweets done by our Prime Minister in his ex-officio capacity on 28th March 2020. The word Ex-officio is a Latin term which means ‘by the right of an office’. Therefore, we can say that the Prime Minister of India had lawfully created this Fund amid the COVID-19 pandemic through just an appeal on social media. This Fund derives its authority from two of its official websites namely, www.pmindia.gov.in and www.pmcares.gov.in. These two websites work almost as a replica to each other. Both of these websites characterises the Fund as A Public Charitable Trust ^[2], which means that it is a Non-profit Non-government entity. If we consider the meaning of the word ‘Charitable’, it generally refers to an action involving public welfare which implies that the funds are being disbursed for the welfare of the public at large and the residual amount wouldn’t be distributed among the creators of the fund. Further, a non-government entity is something that is managed without government intervention. Therefore, a public charitable trust is a non-profit non-government entity that is being managed without any interference from the state and its money shouldn’t be disbursed to make profits out of it.

Recently, when questions were posed before the government about the management of the Fund, the government contended, and the same being reflected on the aforesaid websites, that this fund is managed by its trustees. Under the ‘FAQ section’ mentioned at the top right corner of the website- www.pmcares.gov.in, a good reading of Q-5 suggests that this fund is being managed by its trustees only.^[3] These trustees also have the power to formulate rules or criteria for disbursing the Fund’s money.^[4] Further, a reading of Q-2 reflects that the Minister of Defence, the Minister of Home Affairs and the Minister of Finance, Government of India are ex-officio Trustees of the Fund and The Prime minister of India, having the power to nominate three more trustees on board, is the ex- officio Chairperson of the Board of Trustees. It is significant to accentuate that this Fund is managed by these ministers outside their official capacity. Due to the presence of this unofficial capacity, these ministers cannot be held officially responsible and hence, no questions related to the management of the fund can be raised in the Parliament.^[5]

Such creation and management of the Fund outside the official capacity prima facie suggest that this fund is managed without any state intervention. However, if we make a perusal of all the details mentioned on the aforesaid websites,^[6] we can eruditely conclude that there exists a sufficient state-control over the Fund. Besides this, in the absence of any fair disclosure by the government about the disbursal of Fund’s money and the fact that the details of the above two websites can’t be questioned in the parliament, it is clear there exist an ambiguous intent and a lack of transparency behind creating the Fund.

Problems associated with the Fund:

The above discussion succinctly and sufficiently clears that the creation of Fund is somewhat inconspicuous in nature and contains some problems with it. Without giving a misleading impression, in my opinion, this Fund has four major problems, which are related to the ‘Nature of Authority’, ‘Transparency and Redundancy’, ‘Auditing and Accountability’, and ‘Tax Exemptions’. It would be a toilsome task to discuss all these problems collectively in a single writing. It is therefore better to discuss any one of them in detail rather than discussing all in a brief and restricted manner.

We all know that the Right to Information is one of the fundamental rights envisaged under the Constitution of India and this right can only be taken away by the procedure established by law. The problem related to the ‘nature of authority’ of the Fund is the most disputed and undecided one. The present government is rigidly contending that the Fund is a Public Charitable Trust and not a Public Authority as defined under the Right to Information Act, 2005 (hereinafter as RTI act). Thus, no information related to the Fund can be procured from the government under the RTI act. This contention alone is not sufficient to diddle out the beneficiaries of the Fund of their crucial right to information.

‘Public Authority’ under the RTI Act:

The term ‘Public Authority’ is defined in section-2(h) of the Right to Information Act, 2005. This Act can only be applicable to the bodies/institutions/authorities mentioned under the said provision. Interpreting a statutory provision without considering the related judicial pronouncements is like performing an experiment without relying upon the existing observations. In the year 2011,^[7] the Supreme Court of India had made it clear that section-2(h) contains an exhaustive meaning of the term ‘public authority’. Further, this section also uses the term ‘means… and includes…’ which indicate that it is not inclusive in nature. According to section-2(h), “Public Authority means any authority or a body or an institution of the Government which is either established or constituted (a) by or under the constitution of India; (b) by any other law made by the Parliament; (c) by any law made by the state legislature; (d) by the notification issued or order made by the appropriate Government, and includes any- (i) body owned, or controlled or substantially financed; (ii) non-government organization substantially financed, directly or indirectly by the funds provided by the appropriate government”. As discussed earlier, this Fund is neither created by or under the constitution of India nor established by or under any law made by the Parliament or any state legislature. However, if we consider the factor of control as evident from two of its official websites, this Fund may fall under the sub-clause (i) of clause (d) of sub-section (h) of section (2) of the RTI Act, 2005. This sub-clause contains three important words namely, ‘owned’, ‘controlled’, and ‘substantially financed’, which must be read disjunctively.^[8] Any of these criteria if met, will make the Fund a ‘Public Authority’ under the RTI act. Interestingly, this Fund is neither owned by the government as no ownership lies in a trust nor substantially financed by the government as no real data has been released till now by the government regarding the investments made by the PSUs in the trust. Therefore, out of these three words, the word controlled is of paramount importance to discuss in detail. The Supreme Court of India, in the year 2013,^[9] observed that the word ‘controlled’ mentioned under the sub-clause (i) of clause (d) of sub-section (h) of section (2) of the RTI act, resembles to a substantial control and not merely to a supervisory or regulatory control. Further, in a case later,^[10] the apex court observed that the word ‘substantial’ under the RTI act must be something of a ‘large considerable value’ and it should not be construed as a ‘majority’ or ‘dominance’. The apex court in these cases actually restricted the meaning of the word ‘controlled’.

The above view of the Supreme Court can be criticized on the ground that it is against the objective of the RTI act. Whenever there is any ambiguity regarding the interpretation of any provision, the object, and preamble of act should be looked into. The RTI act has been put into effect with the object of the open and participatory governance which only shall fulfill the need or assurance of the people as envisaged under the constitution of India.^[11] Considering the said objective, a mere regulatory or supervisory control by the government is equally sufficient to designate a body as a ‘Public Authority’ under the RTI act. Besides this, it is also pertinent to discuss that the legislature has not prefixed the word ‘controlled’ by the word ‘substantial’, they have only qualified the word ‘Financed’, in the sub-clause mentioned above. This unequal qualification indicates that the legislature has never intended to qualify or restrict the meaning of the word ‘controlled’. This intention of legislature together with the objective of the act makes it clear that the word ‘controlled’ shouldn’t be confined only to a substantial control. It should be interpreted liberally and shall include a regulatory or supervisory control also.^[12]

In addition to this, the two official websites are using the logo of State Emblem of India for the purpose of communication as well as advertisement of the Fund. According to the State Emblem of India (Prohibition of Improper use) act, 2005, this cannot be done by any person except by any authority notified by the Government of India or by the Government itself.^[13] Thus, it gives the impression that the websites are working under the regulatory control of the Government of India. These websites are also using the domain name of gov.in. This domain can only be regulated by the Ministry of Electronics and Information Technology, a ministry regulated by the Government of India.

It is evident from the above discussion that this government exercises a regulatory or supervisory control, if not a substantial control, over the working of the Fund and the RTI act itself prescribes this type of control to designate a body as a Public Authority. Therefore, the present government should acknowledge this control and allow the applications made under the RTI act as ‘Allowing the transparency only enhances the credibility of an institution’.

Conclusion with less confusion:

The cavil of the centuries titled more towards transparency and, rightly so, for such a right empowers the citizens and citizenry prowess, the most precious treasure in a democratic body polity. Francis Bacon, an English philosopher and former Lord Chancellor of England, in the year 1597 has also said, “Information is the oxygen of democracy, it invigorates wherever it percolates.” Thus, this oxygen cannot be denied even in the time of any exigency situation by merely supplanting a statutory provision. Besides this, transparency also forms a significant part of the rule of law in a democratic country and the existence of the same cannot be dismantled during any exigency. It can only be compromised in some exceptional situations forming a threat to the integrity of the nation or issues involving security concerns or matters of strict confidentiality.

In my opinion, the above discussion as a whole contains two major options regarding the character of the Fund. This Fund can either be a public charity as mentioned on its official websites or a public authority under the RTI act. In the absence of any conclusive precedent regarding the character of the Fund, the executive had cleverly ignored the freedom of information. They had designated the Fund as a public charitable trust which is managed under the private authority of the ministers governing it as its Trustees. If for an instance this stance of the government is considered, they still cannot refuse to acknowledge their duty to disclose information to the beneficiaries associated with the Fund. The Indian Trust Act, 1882 creates an obligation on the trustees to disclose full and accurate information related to the accounts and state of the Trust property.^[14] Therefore, this government should adhere to the existing statutory provisions and also to the Rule of Law. They must disclose all the relevant information related to the Fund either suo motu under the RTI Act or mandatorily under the Indian Trust Act. It is the duty of a democratic state to respect, reflect and rejuvenate the freedom of information as one of the members of the Constituent Assembly had stated, “The Freedom of Information is one of the terms around which the greatest and the bitterest of constitutional struggles have been waged in all countries where the liberal constitutional law prevail.”

Views are personal only

(Aditya is a 1st year scholar from Faculty of Law, B.H.U.)