SC turns down plea to direct transfer of money from PM CARES Fund to National Disaster Response Fund

The Supreme Court on Tuesday refused to direct the transfer of money collected under the PM CARES Fund set up for COVID-19 relief to the National Disaster Response Fund (NDRF).

The Bench of Justices Ashok Bhushan, R Subshash Reddy, and MR Shah also held that contributions to the PM CARES Fund are voluntary, and that there was no statutory prohibition on contributions made to the NDRF, legal news website BarandBench.com has reported.

Further, the Bench clarified that funds collected under the PM CARES Fund are entirely different from the NDRF, and were funds of a charitable trust.

On the petitioner's prayer to set up a National Plan for COVID-19, the court held that plan prepared by the Centre is sufficient to cater to the pandemic.

The petitioner claimed that the new Fund created circumvents the National Disaster Management Act.

The MHA had argued before the Court that the PM CARES fund was a public charitable trust and whoever wants can voluntarily donate in it.

Centre for Public Interest Litigation (CPIL), in the plea claimed that in the backdrop of COVID-19 pandemic, NDRF is not being utilized by the authorities, and establishing the PM CARES Fund is outside the scope of the Disaster Management Act.

This submission was contested by Senior Counsel Dushyant Dave, representing the petitioner, who highlighted that while nobody's bona fides were under the scanner, the only question was pertaining to the circumventing of the law for setting up of the PM CARES Fund.

The audit mechanism of the PM CARES was also questioned, with Dave pointing out that the NDRF has to be audited by the Comptroller and Auditor General (CAG) while “PM CARES is audited by some private auditor". A strong argument was made for the PM CARES Fund to at least be audited by the CAG.

Senior Advocate Kapil Sibal, who was appearing in a connected matter related to drawing up a National Disaster Management Plan, said that since contributions to PM CARES are eligible for Corporate Social Responsibility (CSR) benefits, corporates and others would not have incentive to donate to the NDRF.

The petition filed by CPIL also raised the issue of drawing up a National Plan under the Disaster Management Act in the face of the COVID-19 pandemic. Solicitor General Tushar Mehta had produced this plan before the court at an earlier instance.

The Centre, in its affidavit filed in the matter, defended the creation of the PM CARES Fund and opposed the transfer of these funds to the NDRF. The affidavit says, “There does exist a National Disaster Response Fund as stipulated under Section 46 of Disaster Management (DM) Act, 2005 which so far consisted of the fund in the form of budgetary provisions made by the Central Government in NDRF and State Governments and Central Government in State Disaster Response Funds without any private contribution.”

It was earlier revealed through a Right to Information (RTI) response received by a lawyer that the Fund does not come under the scope of "public authority" under the RTI Act.

In effect, the denial of the PM CARES Fund as a public authority shields it from the ambit of the RTI Act, and consequently, no citizen can obtain details pertaining to the Fund through the RTI route.