Coronavirus and the Constitution – XXX: PM-CARES Fund and the Right to Information Act [Guest Post]

[This is a guest post by Shloka Shah.]

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On March 28, a public charitable trust in the name of the Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (“PM CARES”) was announced to combat the effects of the COVID-19 pandemic. On May 29, in response to an application filed under Section 6 of the Right to Information Act, 2005 (“RTI/Act”), the PM’s Office refused to divulge information about the Fund, stating that it did not fall under the ambit of ‘public authority’ under Section 2(h) of the Act. Through the Supreme Court’s (“SC”) analysis of the relevant provisions of the Act, I intend to counter this response, and analyze the exemptions available to a public authority from disclosing information.

Meaning of ‘Public Authority’

Access to information under the control of public authorities is a fundamental right guaranteed under Article 19(1)(a) of the Constitution. It is therefore imperative to understand its scope. Under the RTI Act, Section 2 states:

(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—

(i) body owned, controlled or substantially financed;

(ii) non-Government organisation substantially financed,

directly or indirectly by funds provided by the appropriate Government.

PM CARES is not a product of the first three clauses. Given that the legal origin of the Fund is shrouded in secrecy, as the trust deed has not been made public, application of the fourth clause is debatable. This line of reasoning has been argued before Court in the past on Prime Minister’s National Relief Fund (“PMNRF”) (more on this ahead).

What brings PM CARES under the ambit of this section is sub-clause (i). In D.A.V. College Trust & Management Society v. Director of Public Instructions the SC bench comprising of JJ. Deepak Gupta and Aniruddha Bose were faced with applicability of the RTI Act to a body not constituted under an act or notification made by the Government. Holding the section to be “inartistically worded”, the Court noted “a big gap” between the four clauses (a) to (d) (“first part”) and following two sub-clauses (i) and (ii) (“second part”). Applying the principle of purposive construction, the Court interpreted as follows, in paragraph 17:

We have no doubt in our mind that the bodies and NGOs mentioned in sub-clauses (i) and (ii) in the second part of the definition are in addition to the four categories mentioned in clauses (a) to (d). Clauses (a) to (d) cover only those bodies, etc., which have been established or constituted in the four manners prescribed therein. By adding an inclusive clause in the definition, Parliament intended to add two more categories, the first being in sub-clause (i), which relates to bodies which are owned, controlled or substantially financed by the appropriate Government. These can be bodies which may not have been constituted by or under the Constitution, by an Act of Parliament or State Legislature or by a notification. Any body which is owned, controlled or substantially financed by the Government, would be a public authority.

The scope of a ‘body owned or controlled’ by the Government was discussed by the SC bench comprising of JJ. K.S.P. Radhakrishnan and A.K. Sikri in Thalappam Service Co-op Bank Ltd. v State of Kerala:

A body owned by the appropriate Government clearly falls under Section 2(h)(d)(i) of the Act. A body owned, means to have a good legal title to it having the ultimate control over the affairs of that body, ownership takes in its fold control, finance, etc. (paragraph 35)

Elucidating further, the Court determined how to test such ownership or control:

We are of the opinion that when we test the meaning of expression “controlled” which figures in between the words “body owned” and “substantially financed”, the control by the appropriate Government must be a control of a substantial nature. The mere “supervision” or “regulation” as such by a statute or otherwise of a body would not make that body a “public authority” within the meaning of Section 2(h)(d)(i) of the RTI Act. In other words just like a body owned or body substantially financed by the appropriate Government, the control of the body by the appropriate Government would also be substantial and not merely supervisory or regulatory.

We are, therefore, of the view that the word “controlled” used in Section 2(h)(d)(i) of the Act has to be understood in the context in which it has been used vis-à-vis a body owned or substantially financed by the appropriate Government, that is, the control of the body is of such a degree which amounts to substantial control over the management and affairs of the body. (paragraph 44, 45)

That the PM CARES Fund is substantially controlled by the Government is evident from its management. The Board of trustees comprises of the Prime Minister as the ex-officio Chairman, and the Ministers of Defence, Home Affairs and Finance as ex-officio trustees. The trustees alone determine how the funds accumulated will be disbursed, as was made evident by the announcement of utilizing INR 3,100 crores on May 13.

It is even recognized as a ‘fund set up by the Central Government for socio-economic development and relief’ by the Ministry of Corporate Affairs (“MCA”) in a statement accepting contributions to the Fund as CSR under Section 135 of the Companies Act, 2013. Interestingly, the MCA categorizes such contributions under the ambiguous entry (viii) of Schedule VII, which relates to ‘social projects’, and not entry (ix), which relates to ‘contribution to the PMNRF or any other fund set up by the Central Government or the State Governments for socio-economic development and relief’, in spite of using those very words. One can only interpret this as a pre-emptive measure to bring the Fund outside the purview of Section 2(h), should it ever be (successfully) challenged in Court.

Since its genesis, the PM CARES Fund has attracted widespread comparisons with the PMNRF. They are analogous in their manner of creation (PMNRF was established subsequent to an appeal made by Pandit Jawaharlal Nehru to combat the effects of Partition), constituent members (PMNRF is also managed by the PMO), and recognized as public trusts liable for 100% tax exemption under Section 80G of the Income Tax Act, 1961. They are also not audited by the Comptroller and Auditor General of India (“CAG”).

In light of this, it becomes relevant to examine the Delhi High Court’s judgment in Prime Minister’s National Relief Fund v Aseem Takyar. The question of whether PMNRF could be interpreted as a public authority under Section 2(h) of the Act was placed before JJ Ravindra Bhat and Sunil Gaur, with the bench rendering a split decision. The matter is presently referred to a third judge.

Justice Bhat, recognizing that Government Servants holding positions in their ex-officio capacity, ipso facto does not amount to the Government exercising control, nonetheless differentiated this principle from PMNRF as follows:

[…] However, PMNRF is not managed by mere officers or government employees. It is PMNRF is headed by Constitutional Authority, i.e. the Prime Minister of India and administered by the Joint Secretary to the Prime Minister-as Secretary of the fund. In addition, who is assisted by the officer of the rank of a director. Furthermore, all disbursements from PMNRF are made solely on the discretion of the Prime Minister. He or she is a public authority and decisions taken by him or her with respect to operation of PMNRF cannot be said to be made in a personal capacity. The decisions of the Prime Minister in this regard must be taken to be official decisions. To say that the use of funds is a personal decision, is a half truth. No doubt, the decision of where to use the funds or make disbursements, is subjective and discretion dependent. However, the use of those funds are not for a personal purpose; rather it is always for some public purpose.

Additionally, recognizing that the three conditions laid down in Section 2(h)(d)(i) are distinct from each other, Justice Bhat brought PMNRF under the ambit of ‘public authority’. Therefore, the summary dismissal of the RTI application by the PMO’s Central Public Information Officer (“CPIO”) was not good in law.

Available Exemptions

The right to information is not absolute. It is fettered in part by Section 8 of the Act, which lays down ten exemptions from disclosure of information. The ones relevant here are Sections 8(1)(e), which protects information emanating from a public authority’s fiduciary relationship with another, and Section 8(1)(j), protecting personal information, the disclosure of which is irrelevant for public interest. Neither of these are applicable to PM CARES Fund.

In Central Board of Secondary Education v Aditya Bandopadhyay, the question for consideration was whether an examinee could review his corrected answer booklet from CBSE, which had rejected such request citing breach of ‘fiduciary relationship’ under Section 8(1)(e) of the Act. The bench comprising of JJ. R.V. Raveendran and A.K. Patnaik discussed as follows:

The term “fiduciary” refers to a person having a duty to act for the benefit of another, showing good faith and candour, where such other person reposes trust and special confidence in the person owing or discharging the duty. The term “fiduciary relationship” is used to describe a situation or transaction where one person (beneficiary) places complete confidence in another person (fiduciary) in regard to his affairs, business or transaction(s). The term also refers to a person who holds a thing in trust for another (beneficiary).

While the Court ultimately held that no fiduciary relationship existed between the two, even if one were to assume its existence, the scope of Section 8(1)(e) only extended to prevent information from being disseminated to a third party:

There is no question of the fiduciary withholding information relating to the beneficiary, from the beneficiary himself. (para 44)

 

As a public charitable trust, the beneficiary of the PM CARES Fund is the public at large. Therefore, while the Fund may reserve furnishing information about specific third parties, general questions such as corpus of funds accumulated should not be rejected.

The test to determine the existence of a fiduciary relationship was discussed in Reserve Bank of India v Jayantilal Mistry. The SC bench comprising of JJ. Eqbal and Nagappan laid down a four-pronged test, consisting of (1) No conflict rule; (2) No profit rule; (3) Undivided loyalty rule; and (iv) Duty of confidentiality, the existence of all conditions being necessary pre-requisites. Noting that PIOs often misused Section 8 to defeat the purpose of the Act, the Court held:

[…]Since the RTI Act is enacted to empower the common people, the test to determine limits of Section 8 of the RTI Act is whether giving information to the general public would be detrimental to the economic interests of the country? To what extent the public should be allowed to get information? (para 65)

In relation to PM CARES, this question is best answered by Justice Ravindra Bhat in PMNRF (supra) itself:

In the present matter, the Fund does not offer any service to the donors or the beneficiaries. Furthermore, the relationship between PMNRF and the donors/beneficiaries does not take colour of a ‘fiduciary relationship’ as described above. The donors do not repose trust in PMNRF in conducting their business and the same holds true for the beneficiaries. On the contrary, the act of donation is an act of charity which is not sufficient to establish a fiduciary relationship. Therefore, the question of there existing a fiduciary relationship does not arise. Consequently, the defence of exemption sought by the Appellant under Section 8(1)(e) of the RTI Act is not sustainable.

As for Section 8(1)(j), a constitution bench of the SC comprising of JJ Gogoi, Ramana, Chandrachud, Gupta and Kaul in Supreme Court of India v Subhash Chandra Agarwal stressed on the need to strike a balance between right to information under Article 19(1)(a) and right to privacy under Article 21, with right to ‘informational privacy’ being recognized in K.S. Puttaswamy & Anr. v Union of India. Any invasion of an individual’s personal information, which does not warrant public interest (i.e., something to know in interest of public welfare, not merely something which is of interest to the public) can thus be protected. But even this is conditional – if on weighing the risks, the CPIO if of the opinion that dissemination of such information is vital, then he may proceed to make such information available. Thus ‘public interest’ is supreme.

It is important to note that in both reported RTI applications rejected by the PMO, no such information was sought. Additionally, the CPIO always has the option to ‘sever’ personal information under Section 10 of the Act. Public interest is clearly at stake, just as it was for PMNRF, as noted by Justice Bhat in his judgment (supra):

A disclosure of such information will ensure that the voluntary donations made by the citizen body is not appropriated by any government official. In this regard, the disclosure of the information sought by the petitioner indeed serves a public purpose. (para 35)

Conclusion

While the PMO’S CPIO continues to deflect important questions on the PM CARES Fund, and the SC continues to dismiss PILs questioning the legality of the Fund as frivolous and ‘having political colour’, giving petitioners the option to either withdraw or pay fines, some progress in the search for clarity comes from the Nagpur Bench of the Bombay High Court. On June 2, a division bench of JJ. S.B. Shukre and A.S. Kilor issued notice to the Fund’s trustees to file an affidavit stating their stand within two weeks, despite the Additional Solicitor General Anil Singh’s contentions that a similar petition was earlier dismissed by SC. The High Court differentiated based on reliefs sought, which included a periodical update on the quantum of funds accumulated, appointment of remaining trustees from opposing political parties and brining the Fund under the review of the CAG. With some glimmer of hope, it remains to be seen how the matter will unfold.