Thursday, February 9, 2023

Cosy Arrangement?

A PIL was filed in the Delhi High Court seeking declaration of the Fund as “State” under Article 12. After all, the Fund had utilised the privileges, benefits and exemptions reserved for the State.

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Recently, the Delhi High Court was told that the Prime Minister’s Citizen Assistance and Relief in Emergency Situation Fund (PM CARES Fund) must either submit to the rigours of the Constitution or refrain from projecting itself as “State” to the world at large.

The division bench, comprising Acting Chief Justice Vipin Sanghi and Justice Navin Chawla, was seized of a plea filed by Advocate Samyak Gangwal, seeking declaration of the PM CARES Fund as “State” under Article 12 of the Constitution.

The PM CARES Fund is a public charitable trust set up in 2020 with the primary objective of dealing with any kind of emergency or distress situation, like the one posed by the Covid-19 pandemic, and to provide relief to the affected. Prime Minister Narendra Modi is the ex-officio chairman of the Fund and the ministers of defence, home and finance are its ex-officio trustees.

The genesis of the dispute relates to the issue of lack of transparency and accountability surrounding the PM CARES Fund on the ground that its  operation  has been exempted from audit by the Comptroller and Auditor General of India (CAG).

Senior Advocate Shyam Divan, representing Gangwal, submitted that the Fund had been established by the Government of India and is deeply and pervasively under the control of the government inasmuch as the Fund is being administered by the Prime Minister’s Office.

He claimed that by virtue of the constitutional functionaries being “ex-officio” trustees of the Fund, the Fund was a “State” under Article 12 of the Constitution. To buttress his point, he highlighted that the Fund utilised the privileges, benefits and exemptions reserved for the State. He also highlighted that the official website of PM-CARES Fund uses the State Emblem of India and is registered by the domain name “”. He argued that such constitutional functionaries cannot contract themselves out of the Constitution by deciding that they will function outside its scope. Such a “cosy arrangement” and a structure which undermines public accountability cannot be allowed under the law, he said. He also stressed that the public has the right to know and that the PM CARES Fund must be governed by the principles of good governance, transparency and public accountability.

“Can you have the Speaker of the House and some members creating a trusted site and saying please donate one and all? Please assume that the cause and the purpose and the object is extremely laudable, but does the Constitution allow you to set up a parallel entity saying that this is not subject to rigours of the State and that CAG (Comptroller and Auditor General of India) does not apply?” he asked. “The cardinal principle is you can’t contract out, there is no escape velocity by which you can escape the Constitution. It’s the Constitution that drags you down so long as you’re discharging the constitutional function,” he added.

Divan further argued that if the government, on the contrary, contends that the PM CARES Fund is not a “State”, then it must refrain from using the State Emblem or the official domain “” for its website. “This is not a structure which our Constitution envisages at all. Either you are State and submit to the rigours of the Constitution or do not publicize that you are State,” he said.

While suggesting that such a structure is legally obnoxious which, if allowed to sustain, would result in a complete defeat of the constitutional machinery, he asked: “Can we, under our Constitution, allow such kind of cosy arrangements?”

When enquired where the High Court under its writ jurisdiction is empowered to grant a declaratory relief, Divan relied on the decision of “KK Kochunni vs State of Madras”, wherein the apex court observed that courts whilst exercising their writ jurisdictions, are empowered to make declaratory order where that is the proper relief to be given to the opposite party.

At the outset, a public interest litigation had been filed by Gangwal seeking clarity on the legal status of PM CARES Fund. The plea sought periodic auditing of the Fund and disclosure of the details of donations received by it, to ensure transparency and accountability.

In the affidavit filed last year by an undersecretary at the PMO, the centre had informed the Delhi High Court that PM-CARES Fund is not a government fund as the amount collected by it does not go to the Consolidated Fund of India. The government contended that there was no control of either the central or any state government/s, either direct or indirect, in the functioning of the Trust.

The matter will next be heard on July 12, 2022.

—By Banshika Garg and India Legal Bureau

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