Regulate Crowdfunding In Private Accounts For Charity : Kerala High Court

The Kerala High Court during a hearing on Friday directed the State to supervise the process of crowdfunding in the State and urged that some sort of government control be placed on the process to ensure its reliability. 

Justice P.B. Suresh Kumar  while hearing the matter commented as follows:

"The court does not want to interdict the crowdfunding process, but the funds should go to the government rather than into the account of private individuals who may or may not give it to those who require the money." 

The Singe bench expressed its concern that 'every Tom, Dick, and Harry was collecting funds via crowdfunding' for the treatment of children suffering from rare diseases and asked the State whether it has any control over such transactions. It was pointed out by the Bench that it was essential to examine where all this money collected was going. 

This development occurred during the hearing of the petition filed by a helpless father seeking assistance from the State to import a life-saving drug from the US for his son who was suffering from Spinal Muscular Atrophy. The Court noted that around 18 crores were recently raised through crowdfunding for the treatment of a child suffering from the rare disease.

'There has to be some government control over the money being collected via crowdfunding for such treatment. Every "Tom, Dick and Harry" cannot be permitted to raise funds like this', the Court emphasized, particularly condemning the act of YouTube influencers raising charity through their account numbers. The State also expressed apprehensions regarding the source of the money being collected through crowdfunding.

Additionally, the Bench questioned that if private individuals and entities can collect crores of rupees in such a short span of time, why the government failed to do so despite pressing circumstances in the State.

"The State only managed to collect 68 lakh to provide free vaccines, but the public managed to collect 18 crores in a week to treat a boy," the court said. "I do not want to interdict the process of crowdfunding, but I want government control over it. Such transcations may destabilise the economy if left unsupervised." 

The Bench found it imperative for the State to frame a policy to govern the process of crowdfunding. There should be a proper framework for the process and the government should act as a watchdog to examine the sources of all the money pouring in through crowdfunding. It was important to protect the rights of people who donate for a social cause and to avoid them from being exploited through fraudulent methods.   

The Court accordingly impleaded the Drugs Controller General of India (DGCI) and the Indian Council of Medical Research (ICMR) in the matter and stated that a detailed order would be passed soon. 

Advocate P Chandrasekhar appeared for the petitioner Arif and had submitted that he obtained permission to import the required medicine, but had no means to fund the same. Arif has moved the court, claiming that he cannot ensure his son's treatment without the support of the state government. The State however responded that it had no means to financially support the infant given the circumstances. 

In the matter, the Court had earlier directed a medical report to be filed regarding the efficacy of treatment of the infant. 

Case Title: Arif v State of Kerala