Supreme Court Reserves Judgment On Plea For Ex-Gratia Compensation To COVID Victims

A Bench of Justices Ashok Bhushan and MR Shah heard the matter and directed the parties to file written submissions within three days.

COURTROOM EXCHANGE

In today's hearing, Senior Advocate SB Upadhyay appearing on behalf of the Petitioner Reepak Kansal, submitted to the Court that the Centre cannot use financial constraint as a ground to not meet its constitutional obligations.

Since there is a statutory obligation, the Government cannot take a plea of fiscal difficulty to say that compensation cannot be granted. Reference was made to the decision in Swaraj Abhiyan v Union of India (2016) 7 SCC 498, where it was held that plea of fiscal difficulty cannot be an argument to defeat a statutory duty.

Mr.Upadhyay that even insurance cover was available only for doctors on regular rolls and not for contractual doctors.

"They are saying this [COVID-19] is not the kind of disaster that the Act foresaw and that it was only formulated for a one-time disaster and not recurring ones like COVID. Floods, tsunami, cyclones are also recurring", submitted Upadhyay. He stated that even by definition of disaster under Section 2(d), COVID could be categorised as a catastrophe.

At this juncture, the Court enquired if the ex-gratia payment had been covered under the 2015 notification. To this, Upadhyay responded that the notification had to be extended to 2021 and he had merely sought for 4 lakhs as the scheme had stated so.

"They have to frame a scheme as per their own capacity. The letter also has to be interpreted as per the situation. They are saying it is a situational interpretation and that 'shall' must be interpreted as 'may'. They must either extend the scheme or frame a new one under Section 12", stated Upadhyay.

The Bench also noted that every disaster could not be judged on the same scale as different disasters had different magnitudes.

Upadhyay concluded his submissions by stating that framing a scheme under Section 12 should not account for financial affordability and that doing so would render the law nugatory; that constitutional obligations could not be set aside for humanitarian needs.

Advocate Gaurav Bansal, a Petitioner-in-Person, then submitted that he would co-opt the submissions of Upadhyay. He further contended that financial situations on the ground were different.

"Because of our patriarchal society, the rural scenario is different. If the man of the family dies, the whole family is devastated. In that scene, this scheme can be implemented. Most of the schemes only focus on medical healthcare workers. We salute them, but there are also people who are present in armed forces, police forces and even in shamshan ghats. They have died while doing their duties. Who will take care of them? The Centre cannot just say that they cannot afford it", stated Bansal.

Advocate Sumeer Sodhi, appearing for four individuals who had suffered loss of family due to the pandemic, also made his submissions. He stated that he had two points to raise – 1. The treatment of unequal disasters equally and how different States were paying different amounts of compensation; 2. He sought to be informed as to how the money for compensation was being funded. In light of this, he submitted that there was a need for a uniform scheme and a consolidated fund to discern how much was being paid and from where the payment was being done.

Solicitor-General Tushar Mehta (SG), appearing for Union of India, then commenced his submissions.

The SG stated that the scheme under DMA showcased that the allocation of funds had taken place with an application of mind. He submitted that as per Section 2(i) and Section 2(m), the focus of the DMA was to mitigate as well as prepare for disasters. Further, it was the Finance Commission which contributed to the NDMA as well as the SDMA. Referring to Articles 280 and 281 of the Constitution of India, the SG averred that classification and allocation of funds was done by the Finance Commission.

"Ultimately what becomes before the Central Government in the form of taxes becomes the total fund and it is allocated. To ensure that this allocation is not arbitrary, we have a constitutional provision. The Finance Commission's focus is more on preparedness, mitigation and response. Disaster management as a subject has evolved over the years. The Commission had in its mind the pandemic and the response that was given", submitted the SG.

The Court then asked the SG as to how one could reach the conclusion that the COVID-19 pandemic had been taken into consideration. To this, the SG responded that the recommendations were with regard to disaster risk management and that future disasters had to be considered.

"Finance Commission recommendations cannot override a statutory obligation and Section 12 cannot be nullified. Finance Commission states the way how mitigation needs to be done, and thus amounts are earmarked. If the plea succeeds, then allocation has to change. It will have to be ratified by the Parliament. My case is that the report of a Commission which was constitutionally constituted has laid down the guidelines for the reliefs sought", submitted the SG.

He clarified that the figures for compensation were not static, but the focus of the Finance Commission was on mitigation, preparedness and response – "We have to keep in mind that this is an ongoing process and instead of one-time relief on death, it is better if we go for a multi-pronged approach of preparedness."

The SG further noted that crematorium workers were not covered and the Centre would take a call on the same, however insurance interventions would be studied by the NDMA to add an extra layer of protection.

It was also submitted that the matter was situational, and that if the situation demanded that minimum standards which were maintained by the Centre and satisfied the judicial conscience, then a writ would not be required.

The Court then asked the SG whether the NDMA had taken any decision regarding no compensation being given as ex-gratia assistance, and what could be done about a uniform scheme. To this, the SG stated that the Centre would consider doing the same outside the ambit of Section 12.

After the SG concluded his submissions, the Petitioners presented their Rejoinder wherein Sodhi objected to the contentions of the SG. The SG then clarified to the Bench, "It's not the case of the government that it does not have money. Our case is that we are utilising the funds available for other things. We would prefer to do that. Food, infrastructure, we are adopting a holistic approach".

The Bench also brought up the issue pertaining to issuance of death certificates, stating, "Prima facie we find that the process is more complicated for such certificates. Can't this process be simplified? Those persons who have already been issued death certificates with no COVID, what can be done for them?"

It was further observed by the Bench that the ground reality was different and that it was difficult for an affected person to get help – "When humanity is gone and black marketing is happening, what can you say? Our priority is the common man."

On this note, the matter was concluded.

BACKGROUND

In an Affidavit filed recently, the Union of India has informed the Supreme Court that payment of ex-gratia to all deceased persons due to COVID-19, is beyond the fiscal affordability of the State Governments, as the finances of State Governments and the Central Government are under severe strain, due to the reduction in tax revenues and increase in health expenses on account of the pandemic.

"It is an unfortunate but important fact that the resources of the Governments have limits and any additional burden through ex-gratia will reduce the funds available for other health and welfare schemes." Centre has said

While highlighting that ex-gratia relief under the Disaster Management Act, 2005, to 12 notified disasters is provided through the State Disaster Response Fund, MHA has submitted that if an ex-gratia of Rs.4 lakhs is given for every person, who loses life due to COVID-19, the entire amount of SDRF may possibly be spent on this item alone.

MHA has also argued that the matter of ex-gratia assistance should be dealt with by the National Authority to whom it has been entrusted under Disaster Management Act, and any attempt to second guess that may create unintended and unfortunate Constitutional and administrative ramifications.

While acknowledging that the affected families need help and support, MHA stated that it is wrong to state that the help can be provided only through ex-gratia assistance as that would be ' rather pedantic and narrow approach'. According to MHA, health interventions, social protection, and economic recovery for the affected communities, would be a more prudent, responsible, and sustainable approach.

Further, MHA has stated that there is no precedent of giving ex- gratia for an ongoing disease or for any disaster event of long duration, extending for several months or years, and granting ex-gratia for one disease, while denying the same for those accounting for larger share of mortality, would not be fair and would create unfairness and invidious discrimination.

This comes contrary to the submission of the Central Government on June 11th, wherein it had submitted to the Supreme Court that the Centre was actively considering the issues raised in two pleas seeking ex gratia monetary compensation of Rs. 4 lakhs or notified ex gratia monetary compensation to the families of the deceased who had succumbed to the COVID-19 pandemic.

The Supreme Court had earlier directed the Central Government to bring on record any policy or guidelines pertaining to death certificates issued to COVID-19 patients, including guidelines by the Indian Council of Medical Research (ICMR).

Further directions were given to place before the Court all the schemes stipulated under Section 12(3) of the Disaster Management Act on the aspect of ex gratia compensation to families of those who had succumbed to COVID-19.