HC asks Centre to file ‘exhaustive’ reply on Fund

HC asks Centre to file ‘exhaustive’ reply on Fund

Subject :Polity

Context: The Delhi High Court on Tuesday expressed displeasure at the Centre over its single-page reply on a petition seeking to declare PMCARES Fund as a ‘State’ under the Constitution to ensure transparency in its functioning.

• In India, fundamental rights guaranteed by the Constitution, in the absence of specific constitutional provisions, are mainly enforceable against ‘the State’, which is defined in Article 12 of the Constitution.
• The State includes the Government and Parliament of India and the Government and the Legislature of each of the States and all local or other authorities within the territory of India or under the control of the Government of India.

Scope of State within Article 12-

• Courts have ruled that where there is pervasive or predominant governmental control or significant involvement in the activities, such bodies, entities and organisations fall within the definition of “the State”.
• The Supreme Court has developed the concept of an “instrumentality of the state”. Anybody which can be regarded as an “instrumentality of the state” falls under Article 12.
• In Ajay Hasia vs Khalid Mujib, the Supreme Court laid down the test to adjudge whether a body is an instrumentality of the government. These are the relevant factors while considering the question of instrumentality of the government-
  • If the entire share capital of the body is held by the government.
  • Where the financial assistance given by the government is so large as to meet almost entire expenditure of the body.
  • If the body enjoys monopoly status which is conferred or protected by the state
  • Existence of deep and pervasive state control.
  • If the functions performed by the body are of public importance and closely related to governmental functions, it is a relevant factor to treat the body as an instrumentality of the government.
• As a result of judicial interpretation, “the State” has been held to include statutory bodies such as-
  • insurance corporations
  • nationalised banks
  • airline corporations
  • electricity boards
  • educational institutions and societies whose composition and administration are predominantly controlled by the government.
• Consequently, the reach and extent of protection of fundamental rights has been widened and greater protection has been afforded especially in the area of employment against discriminatory practices. Again there are private, non-State entities which discharge important quasi governmental or important public functions, which have repercussions on the life and welfare of the community.

Related cases:

About PM CARES Fund

• Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund) was created on 27 March 2020, following the COVID pandemic.
• The stated purpose of the fund is for combating, and containment and relief efforts against the coronavirus outbreak and similar pandemic like situations in the future.
• Prime Minister is the ex-officio Chairman of the PM CARES Fund and Minister of Defence, Minister of Home Affairs and Minister of Finance, Government of India are ex-officio Trustees of the Fund.
• The fund receives voluntary contributions from individuals and organisations and does not get any budgetary support.
• Donations have been made tax exempt, and can be counted against a company’s corporate social responsibility (CSR)
• It is also exempt from the Foreign Contribution (Regulation) Act, 2010, and accepts foreign contributions, although the Centre has previously refused foreign aid to deal with disasters such as the Kerala floods.
• PM-CARES Fund not subject to CAG audit
• PM CARES Fund’s trust deed is not available for public scrutiny.