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Supreme Court Judgement on PM-CARES Fund

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BACKGROUND

The Supreme Court on Tuesday delivered its judgement on the PM-CARES funds. An NGO known as the Centre for Public Interest Litigation (CPIL) had filed public interest litigation (PIL) asking the court to direct the transfer of contributions made to the PM CARES Fund for the pandemic to the National Disaster Response Fund (NDRF). According to the petition, PM CARES Fund violated the legal mandate of the Disaster Management Act, 2005. This is because, as per the Disaster Management Act, the grant made by the individual towards a disaster should compulsorily be credited to NDRF.

The Prime Minister’s Citizen Assistance and Relief in Emergency Situations (PM CARES) Fund was set up by the central government as a public charitable trust in March to deal with any emergency posed by the pandemic and to help those affected by it. The Prime Minister is the ex-officio chairman of the fund and the defence, home and finance ministers are the ex-officio trustees. 

SUPREME COURT’S JUDGEMENT

A three-judge bench of Justices Ashok Bhushan, R Subhash Reddy and MR Shah delivered the verdict on August 18, through video-conferencing. In its judgement, the Apex Court refused to direct the Centre to transfer the contributions made under PM Cares Funds towards National Disaster Response Fund. The court stated that funds collected by the PM Cares Fund are those of charitable trusts and “entirely different”. Since the PM-CARES fund was established as a public charitable fund, no direction can be issued by the court to transfer the funds to NDRF. The central government is free to transfer money to the disaster relief fund if it deems fit.

Furthermore, the apex court also rejected a prayer seeking formulation of a national plan for Covid-19 management, stating that the existing plan under the DM Act is sufficient to deal with the pandemic.

WHY COVID-19 WAS DECLARED A “NOTIFIED DISASTER”?

The Central Government had brought in the coronavirus pandemic under National Disaster Management Act, 2005 and was declared “Notified Disaster”. This was done in order to assist the states under the State Disaster Relief Funds (SDRF). The SDRF was established under the Disaster Management Act, 2005. Under this act, the Government of India shall contribute 75% of the SDRF allocation. However, the funds can be used by the states only for disasters. Thus, COVID-19 was declared as a notified disaster.

REACTIONS ON THE JUDGEMENT

The Indian National Congress Party and other activists have questioned the legal validity of the fund and questioned the need for it, pointing to the similar Prime Minister’s National Relief Fund (PMNRF). Concerns have also been raised on the fact that the fund is not under the audit of the Comptroller and Auditor General of India.

CPIL lawyer, activist Prashant Bhushan tweeted, “Unfortunate that the SC allows the non-transparent and unaccountable PM Cares fund set up as a secret trust to garner money in the name of COVID-19 relief, rather than transferring such funds to the Statutory NDRF which is accessible under RTI and audited by CAG.”

Union Minister Ravi Shankar Prasad said: “Transparency is writ large in PM-CARES Fund both in terms of legal requirement and transparent management of funds received voluntarily… Unnecessary targeting of the PM CARES fund has been done in the high court and the Supreme Court.”

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