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Tuesday, September 22, 2020

SC clears PM CARES: No transfer to disaster fund, Trust so no CAG audit

Two entirely different funds with different object and purpose: Bench

Written by Ananthakrishnan G | New Delhi | August 19, 2020 4:04:15 am
The apex court had on September 11 given its go ahead to NLSIU, Bengaluru to hold its separate exam, which was to be held on September 12. File

The Supreme Court Tuesday “refused” to order transfer of funds from the PM CARES Fund to the National Disaster Response Fund (NDRF), saying they “are two entirely different funds with different object and purpose” and “there is no occasion” for such a direction.

It also said guidelines specifically provide for audit of the NDRF by the Comptroller & Auditor General of India, but PM CARES Fund, being a public charitable trust, “there is no occasion for audit by the Comptroller & Auditor General of India”.

Dismissing a writ petition filed by NGO Centre for Public Interest Litigation (CPIL), the bench of Justices Ashok Bhushan, R Subhash Reddy and M R Shah said: “The funds collected in the PM CARES Fund are entirely different funds which are funds of a public charitable trust and there is no occasion for issuing any direction to transfer the said funds to the NDRF… The prayer of the petitioner to direct all the funds collected in the PM CARES Fund till date to be transferred to the NDRF is refused.”

The bench said “the contributions made by individuals and institutions in the PM CARES Fund are to be released for public purpose to fulfil the objective of the trust. The PM CARES Fund is a charitable trust registered under the Registration Act, 1908 at New Delhi on 27.03.2020. The trust does not receive any Budgetary support or any Government money. It is not open for the petitioner to question the wisdom of trustees to create PM CARES Fund which was constituted with an objective to extend assistance in the wake of public health emergency that is pandemic COVID-19”.

“Outbreak of COVID-19 in India as well as other countries of the world required immediate enhancement in the infrastructure of medical health and creation of fund to contain COVID-19. At this need of the hour, no exception can be taken to the constitution of a public charitable trust, namely, PM CARES Fund, to have necessary financial resources to meet the emergent situation,” the bench said.

It also rejected the prayer for a direction to the government to put in place a new National Plan under the National Disaster Management Act, 2005, to deal with Covid-19 situation.

The bench said “all aspects of epidemics, all measures to contain an epidemic, preparedness, response, mitigation have been elaborately dealt in Plan, 2019 (the National Plan made in 2016 was revised and approved in November 2019) … The petitioners are not right in their submissions that there is no sufficient plan to deal with COVID-19 pandemic. COVID-19 being a Biological and Public Health Emergency, which has been specifically covered by National Plan, 2019, which is supplemented by various plans, guidelines and measures, there is no lack or dearth of plans and procedures to deal with COVID-19”.

Appearing for the CPIL, senior advocate Dushyant Dave contended that the earlier guidelines for administration of NDRF, which came into force from 2010-11, have been modified by new guidelines with effect from 2015-16, and it is not possible now for any person or institution to make a contribution to the NDRF. He said paragraph 5.5 of earlier guidelines has been deleted to benefit the PM CARES Fund, so that all contributions by any person or institution should go to the PM CARES Fund.

The bench, however, rejected this. It said “paragraph 5.5 of earlier guidelines which contemplated contributions by any person or institution for the purpose of disaster management to the NDRF are very much still there in the new guidelines”, that guideline 5.2 “expressly provides that any grants that may be made by any person or institution for the purpose of disaster management shall be credited into the NDRF”.

“The submission that after the new guidelines, it is not possible for any person or institution to make any contribution to the NDRF is, thus, misconceived and incorrect,” it said.

The bench said “the PM CARES Fund has been constituted in the year 2020 after outbreak of pandemic COVID-19 whereas the new guidelines came into force with effect from 2015-16, on which date the PM CARES Fund was not in existence, hence, the submission that new guidelines were amended to benefit the PM CARES Fund is wholly misconceived”.

Dave said though the government had decided to treat COVID-19 as a notified disaster for the purpose of providing assistance under SDRF, no similar notification had been issued for the purpose of providing assistance for COVID-19 under NDRF.

On this, the bench pointed to an order dated April 3, 2020, saying “the Central Government had released first instalment of Rs 11,092 crores out of Rs.22,184 crores which was the Central Share of SDRMF. All States have been allocated different amounts for the purpose of providing assistance under SDRMF”.

It said “in event any State expenditure is in excess of the balance in the State’s SDRMF (State Disaster Risk Management Fund), the State is entitled for the release of fund from NDRF as it is clear from new guidelines” and the “submission that NDRF cannot be used for any assistance for COVID-19, thus, cannot be accepted”.

“When the Central Government is providing financial assistance to the States to contain COVID-19, it is not for any PIL petitioner to say that Centre should give amount from this fund or that fund,” it said.

 

The bench said “Dave during submissions has fairly submitted that he is not questioning the bona fide of constitution of PM CARES Fund. His submission is that NDRF is audited by CAG, but PM CARES Fund is not audited by CAG rather by a private Chartered Accountant”.

It said “the nature of NDRF and PM CARES Fund are entirely different. The guidelines issued under Act, 2005 with regard to NDRF specifically provides for audit of the NDRF by the Comptroller & Auditor General of India whereas for public charitable trust there is no occasion for audit by the Comptroller & Auditor General of India”.

 

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