Why Does PM CARES Not Qualify as a 'Public Authority' Under the RTI Act?

The Bombay high court has clarified that a public charitable trust is considered a public authority if it is owned, controlled or substantially financed by the government.

“A secret policy saves itself from some inconveniences I will not deny; but I believe, that in the long run it creates more than it avoids; and that of two governments, one of which should be conducted secretly and the other openly, the latter would possess a strength, a hardihood, and a reputation which would render it superior to all the dissimulations of the other.”

The government of India seems to have forgotten this valuable advice given by Jeremy Bentham, a remarkable economist, philosopher, jurist and legal reformer. The government is adopting a policy of secrecy and non-disclosure in connection with the ‘Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund’ popularly known as the ‘PM CARES Fund’. It was established on March 27, 2020 as a public charitable trust, to provide assistance and relief in emergency or distress situations, similar to those posed by the COVID-19 pandemic.

A total amount of Rs 3076.62 crore was collected under PM CARES Fund in the year 2020 through contributions received from individuals and organisations. The government did not disclose sufficient information on the official website regarding the nature of the fund, its usage, etc. As a result, applications were filed by different people under the Right to Information Act to obtain necessary information.

In the very first reply, the Prime Minister Office (“PMO”) refused to provide any information on the grounds that the fund was not a Public Authority under Section 2(h) of the RTI Act. The applicant was asked to refer to the website for ‘relevant information’. All the subsequent RTI applications were also rejected on the same grounds. Consequently, a public interest litigation petition was filed before the Delhi high court to bring the fund under the ambit of the RTI Act which is yet to be decided.

Also read: Here’s a List of the Most Significant Contributions to the PM-CARES Fund

In order to understand whether the PM CARES Fund is a public authority or not, it is important to understand the scope of the definition of “public authority” as provided under Section 2(h) of the RTI Act. It states that:

“(h) “public authority” means any authority or body or institution of self-government established or constituted –

(a) by or under the Constitution;

(b) by any other law made by Parliament;

(c) by any other law made by State Legislature;

(d) by notification issued or order made by the appropriate Government, and includes any –

  1.  body owned, controlled or substantially financed;
  2. non-Government Organisation substantially financed, directly or indirectly by funds provided by the appropriate Government;”

There is no debate over the fact that the fund does not fall under clause (a), (b) or (c). The moot point is whether the fund falls under sub-clauses (i) of Section 2(h)(d) i.e. “body owned, controlled or substantially financed” by the appropriate government.

The three conditions provided under this clause i.e. (1) ownership, (2) control and (3) substantial finance are not cumulative, meaning that even if one of the conditions is satisfied by any authority, it will be termed as a public authority. This has been laid down by the Delhi high court in the case of National Stock Exchange of India Limited v. Central Information Commission and Ors (“NSE Case”).

Recently, in a response to an RTI application on PM CARES Fund, the government said that the PM CARES Fund is a body “owned by, controlled by and established by the government of India”. The reply further stated that even then the fund is not a public authority as it is “not at all financed by the appropriate government and administered by private individuals as trustees” This response is in clear violation of the law laid down by the Delhi high court in the NSE case because if ‘ownership and control’ are with the government, that alone is sufficient for the fund to be a public authority.

However, the true nature of the PM CARES Fund cannot be determined based on the reply of the PMO to the RTI applications. Rather, the trust deed of the fund, released by the government in December 2020, will serve as a guide to determine its true nature. The fund has been established as a public charitable trust but that does not exempt it from the purview of the RTI Act. The Bombay high court has already clarified the law on this stating that public charitable trust will be considered a public authority under the RTI Act if it satisfies the condition of sub-clauses (i) of Section 2(h)(d) i.e. if it is owned, controlled or substantially financed by the government. The three conditions being non-cumulative, only the ‘control’ aspect of the trust will be investigated in this analysis without delving into the ‘ownership’ and ‘substantially financed’ aspect of the trust.

Also read: Would Narendra Modi Please Care to Answer Some Questions About PM-CARES?

Clause 5.3 of the trust deed states: “There is no control of either the central government or any state governments, either direct or indirect, in the functioning of the trust in any manner whatsoever.” It is a settled rule of interpretation of a trust deed that the intention of the settler (the entity who established the trust) must be gathered by reading the trust deed as a whole and no one clause should be construed in isolation. Therefore, this clause cannot be considered conclusive on the issue of control as various other clauses convey a different meaning.

Clause 8 of the trust deed defines the powers of the Board of Trustees (“Board”), the board has complete control over management and administration of the trust. The persons holding the following offices have been designated as trustees in their ex-officio capacity as per clause 6 of the deed: (1) Prime Minister, who is also the chairman of the trust, (2) Minister of Defense, (3) Minister of Home Affairs and (4) Minister of Finance. Further, the chairperson has the power to nominate three other trustees from among the eminent persons in various fields like law, health, science, etc. It is an accepted position that merely because certain government servants hold a position in “ex-officio” capacity in a body, the government cannot be said to have been exercising ‘control’ over that body.

However, in the landmark case of Pradeep Kumar Biswas v. Indian Institute of Chemical Biology, the Supreme Court held that if the government has a dominant role to play in terms of power to appoint the secretary, nominate and terminate members of the governing board, then it is said to have control over the body. In the case of the PM CARES Fund, the government officers who hold the positions of trustees are not just ceremonial heads, the entire management and administration of the fund are within their hands.

The Supreme Court. Photo: PTI

The fund is headed by a constitutional authority, the Prime Minister, who has complete power to modify the constitution of the board (Clause 6.7 of the deed). The PMO provides administrative and secretarial support to the trustees which is required for the management and administration of the trust (Clause 6.8 of the deed). Joint Secretary (Administration) in the PMO acts as secretary to the fund and looks after the administration.

The decisions taken by the authorities regarding the operation of the PM CARES Fund cannot be said to have been made in a personal capacity merely because there is discretion involved in the disbursement of funds. The decision must be considered to be official decisions taken by a public authority because the fund is not being used for personal purposes but for the furtherance of public purposes, as it clear from the following primary objectives of the trust which are provided in clause 4.2 of the trust deed:

  1. “To undertake and support relief or assistance of any kind relating to a public health emergency or any other kind of emergency, calamity or distress, either man-made or natural, including the creation or upgradation of healthcare or pharmaceutical facilities, other necessary infrastructure, funding relevant research or any other type of support.
  2. To render financial assistance, provide grants of payments of money or take such other steps as may be deemed necessary by the Board of Trustees to assist the affected population.
  3. To undertake any other activity, which is not inconsistent with the above Objects.”

Also read: PM CARES Fund Now Has ‘Independent Auditor’ But Remains Beset by Lack of Transparency

Further, the fund’s physical infrastructure is the same as that of the central government. It is housed in the PMO, and no separate expenditure is being incurred on its management as it is managed by the PMO officers on an honorary basis. The fund uses the state emblem of the Sarnath Lion Capital of Ashoka as its logo. Moreover, the official domain ‘gov.in’ which is reserved for a few government departments and agencies has been provided to the fund.

In light of all these, it is quite clear that the government has ‘substantial’ control over the fund, not merely a supervisory or regulatory control. Therefore, it meets the requirement of section 2(h)(d)(i) as laid down by the Supreme Court in Thalappalam Service Coop. Bank Ltd. v. State of Kerala, hence it should be considered a public authority under the RTI Act. The government seems to be waiting for the decision of the court to accept this fact. However, the government must realise that “a government by secrecy benefits no one. It injures the people it seeks to serve; it damages its own integrity and operation. It breeds distrust, dampens the fervor of its citizens and mocks their loyalty.”

Aayushi Jain is a fourth-year law student at Gujarat National Law University and a former intern at Madhya Pradesh State Information Commission.