PM Cares Fund is legal

What is PM Cares Fund?

(Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund)

PM CARES Fund (Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund)  has been constituted as a public charitable trust. After outbreak of pandemic COVID-19, need of having a dedicated national fund with objective of dealing with any kind of emergency or distress situation, like posed by the COVID-19 pandemic, and to provide relief to the affected, a fund was created by constituting a trust with Prime Minister as an ex-officio Chairman of PM CARES Fund, with other ex-officio and nominated Trustees of the Fund. The PM CARES Fund consists entirely of voluntary contributions from individuals/organisations and does not get any Budgetary support. No Government money is credited in the PM CARES Fund.

After outbreak of pandemic COVID-19, need of having a dedicated national fund with objective of dealing with any kind of emergency or distress situation, like posed by the COVID-19 pandemic, and to provide relief to the affected, a fund was created by constituting a trust with Prime Minister as an ex-officio Chairman of PM CARES Fund, with other ex-officio and nominated Trustees of the Fund. The PMCARES Fund consists entirely of voluntary contributions from individuals/organisations and does not get any Budgetary support. No Government money is credited in the PM CARES Fund.

This PM Cares Fund has no connection with PMNRF Fund. PMNRF Fund was not subject to any consideration in this case, as popularity reported in the media. The plea was to transfer the fund to NDRF maintained under DM Act 2005. To know about PMNRF read here.

Conclusion by Supreme Court:

The PM CARES Fund has been constituted in the year 2020 after outbreak of pandemic COVID-19whereas the new guidelines came into force with effect from 2015-16, on which date the PM CARES Fund was not in existence, hence, the submission that new guidelines were amended to benefit the PM CARES Fund is wholly misconceived.

When the Centre is providing financial assistance to the State to take measures to contain COVID-19, as we have noticed above that by order dated 03.04.2020 first instalment of Rs.11,092/- crores which is the Central Share to the SDRMF has been given and there is nothing on record that any State has exceeded the expenditure in excess of the balance in the State’s SDRMF, there is no occasion of asking more fund by the State from NDRF.When the Central Government is providing financial assistance to the States to contain COVID-19 it is not for any PIL petitioner to say that Centre should give amount from this fund or that fund. The financial planning is in the domain of the Central Government, which financial planning is made after due deliberation and consideration. We, thus, do not find any substance in the submission of the petitioner that there is any statutory restriction/prohibition in utilization of NDRF forCOVID-19. More so when sub-section (2) of Section 46 specifically provides that NDRF shall be made available to the National Executive Committee to be applied towards meeting the expenses for emergency response, relief and rehabilitation in accordance with the guidelines laid down by the Central Government, the NDRF can be used for containment of COVID-19

It is for the Central Government to take the decision as from which fund what financial measures are to be taken and it is neither for PIL petitioner to claim that any financial assistance be made from particular fund nor this Court to sit in judgment over the financial decisions of the Central Government.

The PM CARES Fund is a public charitable trust and is not a Government fund. The charitable trusts are public trusts. 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.

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.

We have noticed above that guidelines which were issued for constitution and administration ofNDRF and State’s SDRMF, the guidelines provided utilization of fund for limited calamities, which didnot include any biological and public healthemergency. We have already noticed Clause 3.1 of guidelines for administration of NDRF, which did not provide for the calamities which cover the biological and public health emergency. Thus, under the guidelines which were in existence with effect from financial year 2015-16 neither NDRF nor SDRF covered the biological and public health emergencies. It was only by notification dated 14.03.2020 that COVID-19was treated as notified disaster for the purpose of providing assistance under SDRF. Obviously prior to this notification dated 14.03.2020 no contribution by any person or institution in the NDRF could have been made with respect to specified disaster, namely, biological and public health emergency like COVID-19, Outbreak of COVID-19 in India as well as other countries of the World required immediate enhancement in the infrastructure of medical health and creation of fund to contain COVID-19. At this need of the hour no exception can be taken to the constitution of a public charitable trust, namely, PM CARES Fund to have necessary financial resources to meet the emergent situation.

 Prayers (a) to (c) made in the writ petition:
“a.Issue a writ, order or direction to the Union of India to prepare, notify and implement a National Plan under Section 11 read with Section 10 of the Disaster Management Act, 2005 to deal with the ongoing COVID-19 pandemic;

b.Issue a writ, order or direction to the Union of India to lay down minimum standards of relief, under Section 12of the Disaster Management Act, 2005,to be provided to persons affected bythe COVID-19 virus, as well as by the resultant national lockdown;

c.Issue a writ, order or direction to the Union of India to utilize NDRF for the purpose of providing assistance in the fight against GOVID-19 pandemic in compliance with Section 46 of the DMAct, all the contributions/grants from individuals and institutions shall be credited to the NDRF in terms of Section 46(1)(b) rather than to PM CARES Fund and all the fund collected in the PM CARES Fund till date may be directed to be transferred to the NDRF;”

Rejection of prayers by Supreme Court:

In view of the foregoing discussions, the prayer ‘a’ and ‘b’ made in the writ petition are refused.With respect to prayer ‘c’, we make it clear (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.

Full Judgement

Arbitration Clause in Trust Deed is not Enforceable.

Appointment of Arbitrator:

The existence of an arbitration agreement as defined under Section 7 of the Act is a condition precedent for exercise of power to appoint an arbitrator/Arbitral Tribunal, under Section 11 of the Act by the Chief Justice or his designate. It is not permissible to appoint an arbitrator to adjudicate the disputes between the parties, in the absence of an arbitration agreement or mutual consent.

But mere use of the word ‘arbitration’ or ‘arbitrator’ in a clause will not make it an arbitration agreement, if it requires or contemplates a further or fresh consent of the parties for reference to arbitration. For example, use of words such as “parties can, if they so desire, refer their disputes to arbitration” or “in the event of any dispute, the parties may also agree to refer the same to arbitration” or “if any disputes arise between the parties, they should consider settlement by arbitration” in a clause relating to settlement of disputes, indicate that the clause is not intended to be an arbitration agreement. Similarly, a clause which states that “if the parties so decide, the disputes shall be referred to arbitration” or “any disputes between parties, if they so agree, shall be referred to arbitration” is not an arbitration agreement. Continue reading “Arbitration Clause in Trust Deed is not Enforceable.”