The Author, Yash Mittal is student of Institute of Law, Nirma University, Ahmedabad.
Recently in Manohar Lal Sharma v. Narender Damodardas Modi & Ors (2020), the Supreme Court has dismissed the petition filed to assail PM Cares fund on the ground of being created without following the constitutional principles. The petitioner has directly challenged the constitutional validity of the fund, which could be done but at a later stage. Primarily it should have focused on proving it to be a public fund that requires a CAG audit. The petitioner might have a better chance if it could also raise the issue of violation of Article 14, about preferential treatment rendered to PM Cares fund with regards to total exemptions under Foreign Contribution Regulation Act, 2010. Let’s understand the legal position of the PM CARES Fund.
Why CAG needs to audit PM Cares Fund?
Last year in 2019, the government has created “Bharat Ke Veer”, a dedicated voluntary relief fund to provide financial relief to the kins of CRPF personnel who were martyred in the Pulwama attack. Through the recent RTI, it came to know that nearly ₹ 250 crores remains unutilized from the fund. The CRPF informed that almost every affected family has received compensation from the fund. What if the amount remains unutilized in the funds created by the governments? Probably the remaining monies might be transferred to the Consolidated Fund of India which is governed under Article 266 of the Indian Constitution which mandatorily requires the CAG audit.
There were various funds established by the various governments for donating during the time of disaster or economic imbalances. Transparency always remains a core issue associated with such types of funds. With regards to PM Care’s fund, the government clarified that the Comptroller and Auditor General of India (CAG) will not audit the PM Cares fund; rather it will be audited by independent auditors appointed by the trust. The major issue associated with the PM Cares fund is its administration. According to the operational scheme of the fund, the Prime Minister and the trustees enjoy the voting right concerning deciding the utilization of the fund which sidelines the opinion of members from civil society who are also members of the trust, thus making the PM cares fund a sole prerogative of the government.
The funds like PMNRF, PM Cares, CM Relief fund need to have an oversight of legislature because apart from receiving funds from private individuals and body corporate it also receives substantial chunk of monies from MPLADS and MLALADS funds which came from Consolidated Fund of India and Consolidated funds of States respectively. Article 149 of the Indian Constitution mandates the audit of Consolidated Fund of India by the CAG, a supreme auditing institution of India, out of which various expenditure are made for the public welfare schemes.
In Association of Unified Tele Services Providers & Others v. Union of India,(Special Leave Petition (Civil) No.1804 of 2014), the court upheld the arguments of learned senior counsel Harish Salve that the scope of Article 149 of the Constitution of India, particularly the phrase “accounts of the Union and States and any other authority or body”. A composite interpretation would reveal that the term ‘body’ is to be construed in the light of the continuing term “Union”, “States” and “authority” all of which connote some form of State control. The PM Cares fund involves substantial control of the government which makes it eligible to be audited by CAG.
Whether exemption to PM Cares Fund is in violation to Article 14?
The PM Cares fund is exempted from operation of all provisions of the Foreign Contribution Regulation Act (FCRA) and currently accepting donations from individuals and organisations based in foreign countries through foreign debit/credit card and wire transfer/SWIFT. The legislative intent to enact FCRA Act is to regulate the inflow of foreign contribution in India which could be detrimental to the national interests and for the matters incidentally connected with it. All charitable trusts come under the purview of this Act, and in last few years the Ministry of Home Affairs (MHA) has found 8,000 such trusts which are violating the FCRA Act and there license has been cancelled with effect thereto.
The important question here arises is whether the government will found its own created PM cares fund guilty, if, it violates FCRA Act? This question might seems absurd, but important as it would cause grave injustice to the principle of Nemo Judex In Causa Sua, which means no one should be judge in his own cause. The altogether exemption from FCRA for PM Cares fund provides a safe route to the government to receive unlimited foreign contribution without any checks and balances.
Is PM cares fund, a public charitable trust, receiving preferential treatment when compared to other charitable trust that are required to register under FCRA Act for receiving foreign contribution? The Supreme Court in plethora of judgments has given wide exposure to Article 14 of the constitution which implies “equal treatment in equal circumstances”. In Sri Srinivasa Theatre v. Govt. of Tamil Nadu, (1992) 2 SCC 643, the Supreme Court explained the two facets of concept of equality before law, firstly “no privileged person or class and that none shall be above law” and secondly, “the obligation is upon the state to bring about, through the machinery of law, an equal society or, equality before the law can be predicated meaningfully only in equal society.” Moreover in In Re Special Courts Bill, 1978 AIR 1979 SC 478, Justice Y.V. Chandrachud observed “the underlying principle of the guarantee of Article 14 was that all persons similarly circumstanced should be treated alike both in privileges conferred and liabilities imposed.”
The government in the case PM cares fund is acting against the constitutional spirit of Article 14 by arbitrarily backfiring the entire FCRA Act from its purview. That means, there would not be any registration, no maintenance of account, no inspection of account, no seizure of account, no confiscation of illegal foreign donations, no punishment (which would otherwise be 5 years imprisonment, or with fine, or with both). The PM cares fund stands on the same pedestal when compared to other charitable trusts. However, a preferential treatment by the government would make it a favourite destination for hawala transactions or such transactions which are prohibited under the provision of Indian law.
