On the PMNRF and the PM CARES Fund

Ever since the PM CARES Fund was launched on March 28, 2020 to primarily solicit voluntary contributions to deal with the extraordinary crisis created by COVID 19, quite a few questions have been raised regarding its legality and necessity. This led me to examine the legality of the PMNRF itself and it turned out that the history of the PMNRF and its nature have received judicial attention.

In Prime Minister’s National Relief Fund V. Aseem Takyar (LPA 231/2016), a Division Bench of the High Court of Delhi comprising Justices Shri Ravindra Bhat and Shri Sunil Gaur was seized of the question of whether the PMNRF constituted a “public authority” for the purposes of the RTI Act. In a split verdict delivered on May 23, 2018, Justice Ravindra Bhat (presently an Hon’ble Judge of the Supreme Court) examined the issue at some length. Following are a few relevant excerpts from his opinion:

The PMNRF was established pursuant to an appeal made by way of a press note dated 24/01/1948 by the then Prime Minister Jawahar Lal Nehru. He felt the need to have such a fund to make ends meet in the hard times owing to rioting and exodus from Pakistan on occasion of partition of India. In 1973, an application was filed before the Income Tax authority under Section 12A of the Income Tax Act, 1961 to register the fund as a “Trust” for the purposes of Income Tax exemption. The said application of the Fund was allowed by the Commissioner of Income Tax on 18.09.1973 and the fund was registered as a “Trust” bearing No. DLI(C)(T-25)/73-74. Subsequently, the fund was also allocated a separate Permanent Account Number (PAN). Though, no specific Trust Deed was executed for the said purpose, the fund was, however, deemed to be a “Trust”.

Finally, in 1985, the Managing Committee of PMNRF entrusted the entire management of the said fund to the Prime Minister who was given the discretion to appoint a secretary of the fund to manage it. Since its inception, the PMNRF has been receiving voluntary donations from individuals and institutions. The funds so received by it are disbursed to provide immediate relief from natural calamities, major accidents, serious ailments, riot, etc. as per discretion and under directions of the Prime Minister.

13. The genesis of PMNRF reveals that it is a body which is not established by or under the Constitution or by any other law made by the Parliament or by any other law made by State Legislature. Therefore, PMNRF is not a “public authority” as prescribed under Clauses (a) to (c) of sub-Section (h) of Section 2 of the RTI Act. What needs consideration whether PMNRF can be said to be a “public authority” as defined under Section 2(h)(d) of the RTI Act. The Fund argues that the Press Note dated 24/01/1948 was an appeal made Pt. Nehru in his personal capacity and that it was not a decision of the Central Government at that time. Therefore, it cannot amount to a body established “by notification issued or order made by the appropriate Government” under Section 2(h)(d) of the RTI Act.

This court is of the opinion that directions of the Prime Minister inviting contributions and setting up a Committee comprising of the Prime Minister himself along with the Deputy Prime Minister, Finance Minister and other important highest state functionaries as “Managers” of PMNRF cannot be deemed to be or be considered as actions in a personal capacity. Those actions are meant to considered to be actions of the Government which the Prime Minster represents. Further, registration of PMNRF as a Trust for the purposes of income tax exemption, obtaining of Permanent Account Number (PAN) of the said fund and entrusting the management of the fund qualify as an “order made by the appropriate government”. Therefore, PMNRF must be deemed to be a “public authority” within the meaning of Section 2(h)(d) of the RTI Act.”

After a detailed discussion on the nature of the PMNRF and the provisions of the RTI Act, Justice Bhat arrived at the following conclusion:

“35. In light of the foregoing discussion, the Court holds that whilst PMNRF does not receive funding from the Central or State Governments, yet, it is administered in the office of the Prime Minister in accordance with the policy which exists in the public domain. This is on the strength of the prestige lent by the Prime Minister, his office and the confidence that is generated that such amounts would be used for funds in the exercise of discretion for many contingencies that the donor may visualize, (or not visualize, but is confident would reach deserving beneficiaries or causes).

It has to be emphasized that the appeal to generosity (in seeking donation) inherent through the nature of the fund is the confidence and trust that millions of donors repose in the Prime Minister and the office of the prime minister. All those seconded to the office of the fund are public servants; they have no personal stake or interest. Such a fund cannot but be called as a public fund. The Prime Minister has no personal stake or interest in the receipt or disbursement. The disbursement of amounts is towards deserving and noble causes, especially in unforeseen contingencies and calamities. Donations to the fund come from all kinds of sources including, sometimes, State Undertakings, both Central and State. Many such donors may even publicise about their donations in the media.”

In contrast to Justice Bhat’s Opinion, Justice Gaur delivered the following dissenting Opinion:

“A bare perusal of the above Preamble (of the PMNRF), makes it amply clear that appellant-Trust is neither constituted by the Parliament nor by the Government and it is not managed by Government functionaries in their official capacity, but by multiple delegates.

Contributions made to appellant-Trust are exempted under the Income Tax Act, 1961, but that by itself would not justify the conclusion that it is a “Public Authority”. It is relevant to note that contributions flowing out of budgetary sources of Government or from the balance sheets of the public sector undertakings are not accepted. What persuades me to hold that appellant-Trust is not a “Public Authority” under the RTI Act is that Rule 47 of the Rules of Procedure and Conduct of Business in Rajya Sabha and Rule 41 of the Rules of Procedure and Conduct of Business in Lok Sabha prohibit questioning of Ministers in Parliament regarding matters which are not primarily the concern of the Government.

The cause for which appellant-Trust was created and exists is purely charitable and neither the funds of this Trust are used for any Government projects nor is this Trust governed by any of the Government policies. So, how can this Trust be labelled as ‘Public Authority’. Thus, I am of the considered view that appellant-Trust does not owe its genesis to a decision or function of Appropriate Government and Funds of appellant-Trust do not have any government character as no guidelines can be laid down for disbursement of the amount from the Funds of appellant-Trust and the contributions made to appellant-Trust enjoy exemption under Income-Tax Act like other private Trusts.

Relevantly, PMNRF cannot be deemed to be “Public Authority” on the premise that managers of PMNRF i.e. Prime Minister, Deputy Prime Minister, Finance Ministry do not act in personal capacity. It is so said because these State Functionaries manage the PMNRF in their ex-officio capacity. If PMNRF is not non-governmental organization, then what is it? Prime Minister or any of the Managers of PMNRF does not have a legal title or basis to claim ownership of PMNRF. In fact, PMNRF is a Trust which is neither owned, controlled or financed by the Government. As explained in President’s Secretariat v. Nitish Kumar Tripathi, 2012 SCC On Line Del 3268, public funds are those funds which are collected by the State from the citizens by imposition of taxes, duties, cess, services charges, etc. Quite evidently, no governmental control in the management of PMNRF exists. PMNRF nowhere admits that it provides any information.

Since PMNRF is not “Public Authority” under the RTI Act, therefore, second issue regarding information sought being within the public domain does not survive for consideration. If at all, the second issue is to be considered, though not necessary, traditional custom of “Gupt Daan” needs to be viewed in light of Supreme Court’s Constitution Bench decision in Justice K.S. Puttaswamy (Retd.) and another v. Union of India and Others, (2017) 10 SCC 1 wherein it has been unanimously declared that the right to privacy is protected as an intrinsic part of the right to life and personal liberty under Article 21 and as a part of the freedoms guaranteed by Part III of the Constitution.”

Given the difference of opinion between the two Judges, the matter was referred to the Hon’ble Chief Justice of the High Court for the opinion of a third Judge. I checked the website of the Delhi High Court for the status of the case and it appears to be pending.

Despite the issue not having attained legal finality, I think what bears noting is the fact that the PMNRF itself was created based on an appeal by Mr. Nehru, and did not have a Trust deed when it applied for a PAN as a Trust. It was deemed a Trust and has functioned without a deed till date. It is a judicially recorded fact that the PMNRF itself has no statutory basis for its creation. Therefore, it may not be right to impute malafides to the creation of the PM CARES Fund or to question its legality without a stronger basis. However, given that the official website of the Fund has broadly spelt out its objectives, and also speaks of a Trust to manage it, I don’t see why the Trust Deed cannot be made public in the interest of probity and accountability.

Also, I tend to agree with Justice Bhat’s view that since the call for voluntary contributions under the PMNRF is not made in the name of an individual, but in the name of the august office held by the individual who holds no less than the post of the Prime Minister, the PMNRF must be deemed a public authority within the meaning of Section 2(h)(d)(ii) of the RTI Act. This is all the more so since the funds are meant to be utilized only for public purposes. I see no reason for taking a different position with respect to the PM CARES Fund.

On the need for a separate Fund when there already exists a PMNRF, I have compared the preamble and objective of the PMNRF with the objectives of the PM CARES Fund as stated on its official website. While there is an undeniable overlap with respect to natural or man-made calamities, it appears that the PM CARES Fund has a specific public health focus. Though it could be argued that the same is capable of being accommodated within the PMNRF, the Government may have deemed it fit to tap into the current mood of Indians through a specific fund in the backdrop of the COVID-19 Pandemic, which it is within its power to do so legally since there is no law prohibiting it either expressly or implicitly.

In view of this legal position, I honestly fail to see the cause for a controversy given the phenomenal amount (over INR 6000 Crores) collected in the PM CARES Fund in such a short period, which proves that it has had the desired effect. Perhaps the same amount could have been collected through the PMNRF. But that would be a mere logistical argument to make in the backdrop of the extraordinary situation we are faced with. Sure, calls for making public the Trust Deed of the PM CARES Fund in the interest of greater probity are fair, legitimate and reasonable. But to question the need for a new fund is to split hairs and does not seem to hold much water.

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