No Occasion For CAG Audit Of PM CARES Fund As It Is A Public Charitable Trust: SC [Read Judgment]

The Supreme Court has observed that there is no occasion for audit of PM CARES Fund by the Comptroller & Auditor General of India as it is a public charitable trust.

The bench comprising Justices Ashok Bhushan, R. Subhash Reddy and MR Shah observed thus while dismissing the Public Interest Litigation filed by Centre for Public Interest Litigation which sought directions for evolving a new national plan under Section 11 of the Disaster Management Act to deal with COVID-19, and also the transfer of funds from PM CARES to National Disaster Response Fund [NDRF].

One of the contention raised by CPIL was that NDRF is audited by CAG but PM CARES Fund is not audited by CAG rather by a private Chartered Accountant. Senior Advocate Dushyant Dave, who appeared for the CPIL, submitted before the Court that, by creating PM CARES Fund the NDRF is being circumvented. "What cannot be done directly cannot be done indirectly. Although, NDRF is audited by CAG, the PM CARES Fund is audited by only private auditors.", Sr. Adv Dave contended.

While addressing this contention, the bench of Justices Ashok Bhushan, R. Subhash Reddy and MR Shah observed:

"Shri 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. 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."

The court also observed that PM CARES Fund is a public charitable trust and is not a Government fund. It observed that the mere fact that administration of the Trust is vested in trustees, i.e., a group of people, will not itself take away the public character of the Trust. In this context, the court referred to an earlier decision in Mulla Gulam Ali & Safiabai D. Trust Vs. Deelip Kumar & Co., (2003) 11 SCC 772.

"The contributions made by individuals and institutions in the PM CARES Fund are to be released for public purpose to fulfill 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."

While dismissing the PIL, the bench answered the legal issues raised by CPIL as follows:

1. Union of India is not obliged to prepare, notify and implement a fresh National Disaster Management Plan for COVID-19
2. Union of India is not obliged to lay down minimum standards of relief under Section 12 of the Act, 2005 for COVID-19 and the guidelines issued under Section 12 providing for minimum standards of relief holds good for pandemic COVID-19 also
3. The Union of India can very well utilize the NDRF for providing assistance in the fight of COVID-19 pandemic by way of releasing fund on the request of the States as per new guidelines.
4. Any contribution, grant of any individual or institution is not prohibited to be credited into the NDRF and it is still open for any person or institution to make contribution to the NDRF in terms of Section 46(1)(b) of the Act, 2005. The contribution by any person or by any institution in PM CARES Fund is voluntary and it is open for any person or institution to make contribution to the PM CARES Fund.
5. 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 Court also clarified that (i) that there is no statutory prohibition for the Union of India utilizing the NDRF for providing assistance in the fight of COVID-19 in accordance with the guidelines issued for administration of NDRF; (ii) there is no statutory prohibition in making any contribution by any person or institution in the NDRF as per Section 46(1)(b)of the Act, 2005.

Case details
Case name: CENTRE FOR PUBLIC INTEREST LITIGATION vs. UNION OF INDIA
Case no.: WRIT PETITION (CIVIL) NO.546 OF 2020
Coram: Justices Ashok Bhushan, R. Subhash Reddy and MR Shah
Counsel: Sr. Adv Dushyant Dave and SG Tushar Mehta